Freeport Indonesia Miners Head Back to Work

Thousands of workers headed back to Freeport-McMoRan's Grasberg mine in Indonesia on Sunday in a fleet of buses after ending a four-day walkout that sent copper prices to seven-month highs.

The miners were due to resume work after Tongoi Papua, a group representing native Papuan workers, reached a deal late on Saturday to end the strike.

The huge mine on the island of Papua produces more than 500,000 tonnes of copper annually and is Indonesia's biggest source of tax revenue.

"We are going to ask all workers who have been rallying to return to work immediately," Frans Pigome, chairman of Tongoi Papua, told a news conference late on Saturday.

Freeport had agreed to increase the standard monthly salary to 3.1 million rupiah ($341) from 1.5 million rupiah, he said. Workers had initially asked for 3.6 million a month.

The company had also agreed to set up a department to handle the welfare of native Papuan workers.

He said the firm had also promised to replace a number of senior managers, including Armando Mahler, president director of Freeport Indonesia, if it was found that they had failed to meet the company's commitment of improving the welfare of workers.

Mindo Pangaribuan, a spokesman for Freeport Indonesia, said that the firm had agreed to a feasibility study for the creation of a Papuan Affairs Department and remained committed to increasing the number of Papuans in senior posts.

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The Papuan workers had demanded more career opportunities for native workers, improved recruiting and better pensions. The protest coincided with talks over a new two-year collective labor agreement for Grasberg's 9,000 direct employees.

Arizona-based Freeport said on Saturday that mining and milling had been hit, but said stocks were being used for shipping.

It is unclear how many workers had walked off the job. Organizers of the protest put the total at 6,000, but that includes 2,000 with companies sub-contracted by Freeport.

With copper in short supply worldwide, traders have been watching developments closely at the mine.

The walk-out helped lift copper prices above $8,000 per tonne on the London Metal Exchange on Friday, its highest level since Sept. 7. The all-time high was $8,800, reached last May.

The Grasberg mine has long been controversial because of its environmental impact, the share of revenue going to Papuans and the legality of payments to Indonesian security forces who help guard the site. (Additional reporting by Ade Mardiyati in Jakarta)