Striking union workers at Freeport Indonesia's giant Grasberg copper mine are sticking to pay demands for $7.50 an hour, pouring cold water on government claims that they are nearing a deal to resolve the country's longest-running mining dispute.

Miners at Grasberg, the world's second biggest copper mine, have been on strike since mid-September, leading Freeport McMoRan Copper & Gold Inc to declare a force majeure on concentrate shipments last month.

The country's new energy minister Jero Wacik told reporters in Bali on Wednesday that the two sides were closer to a pay deal, with the union having reduced its demand to $4.00 an hour and the company having raised its offer to $3.09 an hour.

Freeport has not stated its pay offer publicly, though the $3.09 would be higher than the 35 percent rise the union has previously said it offered them. However, the union said on Wednesday it had not dropped its own demands.

Union official Virgo Solossa told Reuters that the union would re-consider if the company offered above $6.00 an hour, which would be up from current pay of around $2.00 an hour for workers.

Wacik said the government, which owns a minority stake in Freeport Indonesia, was trying to help achieve a deal and urged the firm to loosen its position to end the strike.

The strike, extended to mid-December, has severely disrupted the company's production. Freeport has also suffered sabotage to pipelines to its port and worker blockades on supply routes for fuel and food to the remote mountain mine in Papua.

Violence has escalated during the strike in a region seeing a long-running and low-level separatist insurgency, with unidentified gunmen on Wednesday shooting at both a security car on a Freeport mining road and a shipping container.

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