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Freeport Indonesia copper mine strike to continue next wk
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8th July 2011
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TIMIKA, Indonesia - A strike paralysing output at Freeport Indonesia's Grasberg mine, one of the world's biggest sources of copper and gold, will extend into a second week after talks between the firm and workers broke down, a union official said on Friday.

The union, representing 8 000 workers that have been on strike since Monday, called on U.S.-based Freeport-McMoRan Copper & Gold to send its chairman James Moffet to the remote Indonesian mine to speak to them over the pay dispute.

"Moffet has to come and talk. No Moffet, then no work," said the union's head Sudiro, adding there had been no clear result after a day of negotiations brokered by a local parliament in the eastern Papua province.

The strike this week at Grasberg, which holds the world's biggest recoverable copper reserves and largest gold reserves, has combined with weather-related disruptions at top mines in Chile to help boost prices of the industrial metal to a three-month high on Friday.

Freeport has said only that its shipments of copper concentrate have not been affected, though many workers and government officials have said production has been completely halted since Monday.

"It's all blocked," Thamrin Sihite, a director general for minerals at Indonesia's energy and mineral resources ministry, said on Friday.

Analysts say the longer the dispute lasts, the more likely Freeport is to declare force majeure -- a move that frees it from contractual obligations due to events beyond its control.

Shares in Freeport rose 4 percent on Thursday after copper hit its highest price since April.

The union is pushing for higher pay for workers getting $1.50 an hour, since it says other Freeport workers worldwide get 10 times that, and had threatened on Thursday to extend the seven-day strike by a week if the demands were not met.

Talks have been resecheduled for next Monday, though union official Virgo Solossa said the union did not want to negotiate with the current management.

"The letter to extend the strike has been addressed to the local government," Solossa said. "We feel that the management has no good intentions anymore," he added.

The local parliament's head Trifena Tinal said Freeport should change its negotiating team, and called on the U.S. miner to not discipline or dismiss any workers over the strike.

Freeport has said the strike is illegal, though it said earlier on Friday it was prepared to start negotiations over pay for a two-year period starting in October.

"The company has requested that employees return to work while this issue is being resolved to avoid adverse financial impacts to employees, the government of Indonesia and the company," Freeport Indonesia said in a statement.

Freeport's Indonesia mine is a major contributor to central government revenues. A separatist insurgency and struggle over resources has lingered for decades in the Papua province.

Edited by: Reuters

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