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Freeport replaces CEO at Indonesian unit after strike
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27th January 2012
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JAKARTA – Freeport-McMoRan Copper & Gold's will appoint a new chief executive at its Indonesian unit, the Arizona-based miner said on Friday, as it looks to turn the page after it made an agreement last month to end a crippling three-month strike.

Rozik Soetjipto will replace outgoing CEO Armando Mahler, who will become a senior advisor. The move is being made to "strengthen relationships with stakeholders," Freeport said in a statement.

Freeport Indonesia has had force majeure in place since last October on some concentrate exports from its huge Grasberg copper and gold mine in Papua, after workers went on strike for better pay.

The strike ended on December 14 with a deal on a pay increase, allowing workers to gradually return to work at the world's second-largest copper mine. The force majeure has yet to be officially lifted despite the resumption of some shipments.

"The new management organization will enable us to renew our commitment to operate the Grasberg mine in Papua in a safe, efficient and world class fashion for the benefit of our employees, the local community, and the Republic of Indonesia, and to achieve enhanced representation of the Company with Indonesian governmental officials and other stakeholders in Jakarta," Soetjipto said in a statement.

Soetjipto has served on the board of commissioners of Freeport Indonesia since 2000 and previously held a number of senior positions in Indonesia's department of mines and energy.

The Freeport Indonesia strike rocked labour relations in Southeast Asia's biggest economy and crippled production at the world's largest gold mine.

Losses due to the strike amounted to 100,000 tonnes of copper concentrate, according to analysts' estimates.

"It's a smart move on the part of Freeport," said Gavin Wendt, a Sydney-based analyst at MineLife. "There was a very strong likelihood that there would be further incidents...the company had to make a very big change at the top. It's all to do with public relations. It was clear that his predecessor, for whatever reason, hadn't done a fantastic job."

The strike was the longest in recent Indonesian history and represents the first major attempt by workers to reap greater financial rewards in one of the world's hottest emerging markets.

Security is also poor in the highlands of central Papua because of a low-level insurgency by militants demanding independence for the western part of the island from Indonesia.

Last week, Freeport reported a 60 percent drop in fourth-quarter profit, hurt by the strike at its Grasberg mine.

"It gives the impression that the company is listening and engaging," Wendt added. "Whether it's just shuffling deckchairs on the Titanic...is immaterial."

Edited by: Reuters

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