Freeport Mine Workers Gather for Rally; Copper Gains

Freeport Mine Workers Gather for Rally; Copper Gains

Workers at Freeport-McMoRan Copper & Gold Inc.’s Grasberg mine in Indonesia rallied to demand higher pay in a protest that may to curb output at the world’s second-largest copper mine. The price of the metal gained.

Protesters are moving to Timika, the regency’s capital, said Frans Pigome, the head of Tongoi Papua, which represents native Papuans. Timika is about 60 miles (96 kilometers) from Grasberg. Mining work was unaffected, Freeport’s Indonesian unit said in an e-mailed statement.

The prospect of disruption at the mine has helped to drive copper prices in London to their highest close since July. The Indonesian protest reflects miners’ ambitions to secure better pay as metals prices surge on increased demand, led by China.

“This is a corporate matter, but if it drags on it will disturb production,” Minister for Energy and Mineral Resources Purnomo Yusgiantoro said in Jakarta today. “We are asking them to conduct talks with the protesting employees.”

Copper for delivery in three months on the London Metal Exchange advanced for a fourth day, gaining as much as $41, or 0.5 percent, to $8,090 a ton. The contract, which settled at $8,049 yesterday, the highest close since July 14, traded at $$8,070 at 10:31 a.m. Jakarta time.

“Our operations are continuing,” Budiman Moerdijat, a spokesman for Freeport’s Indonesian unit, said in an e-mail. “We remain at full production of concentrate and metal, and concentrate shipping has not been affected.”

Police Escort

“There are about 2,500 protesters now in the rally,” said Alfred, deputy police chief for the Mimika regency, where Timika is located. There were 1,200 security personnel on duty, who were escorting the workers, said Alfred, who uses only one name.

Freeport has 9,000 employees directly under its management in Indonesia, of which a third are Papuans, the company’s local unit has said. Pigome, the protest leader, has said that today’s rally would be attended by both Freeport workers and those who work for companies that support the mine.

Wage demands are “part of the industry now,” Jonathan Barratt, managing director for Sydney-based Commodity Broking Services Co., said by telephone. “As companies enjoy sustained profits, companies should share it down the line.”

Tongoi Papua has demanded that the basic monthly salary of lowest-grade mine workers be raised to 3.6 million rupiah ($396) from 1.45 million rupiah. The group, which also wants a better career track for Papuans, has said the rally will continue until Freeport agrees to its demands.

“We are going to ask the local parliament to mediate talks between us and Freeport’s management in the U.S. and Indonesia,” Pigome said. Freeport, based in New Orleans, runs Grasberg through a local subsidiary, PT Freeport Indonesia.

`Peaceful Rally’

“We’re not expecting any violence from the protesters,” said Alfred, the deputy police chief, in a telephone interview. “They are well-coordinated, and this is a peaceful rally.”

Grasberg is second only to Escondida in Chile in terms of copper output. Freeport plans to produce 1.1 billion pounds of copper from the site this year compared with 1.2 billion pounds in 2006. Gold output may gain 6 percent to 1.8 million ounces.

Demand for refined copper in China, the world’s biggest user of the metal, may rise 10 percent this year to 4.3 million tons, according to CRU International Ltd., a research company.

The expansion of China’s electricity-generation capacity would drive the rise in consumption, Mary Chi, a Beijing-based analyst at CRU, said April 16. Copper is used in pipes and wires.

Economic growth in China, the world’s fourth-biggest economy, will be 10 percent this year, the central bank’s research bureau forecast in March. That compares with an expansion of 10.7 percent in 2006, the fastest pace in 11 years.

Papua, formerly known as Irian Jaya, is Indonesia’s easternmost province.

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