Grasberg Mine Production Curtailed By Freeport-McMoran Inc (NYSE:FCX) Following Continuous Roadblock

The production, at the second largest copper mine of the world (in terms of capacity) Grasberg, is curtailed by Freeport-McMoRan Inc (NYSE:FCX) as the roadblock by workers entered fourth consecutive day. The workers in Indonesia have blocked the main road that is leading to Grasberg, due to which the metal prices have also started soaring in London.

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Freeport in Negotiation with the workers

The spokeswoman of PT Freeport Indonesia, Daisy Primayanti, while texting Bloomberg, informed that the company is holding negotiations with the workers in order to resume the work. The output and production was suspended on March 16, 2015. The workers’ union spokesman for Freeport Indonesia, in the meanwhile, explained that the concentrate shipments have not been affected due to old stockpiles, as of now.

Reason for Blockade

Fifty workers in all have blocked the road, and according to the Union, there was no intimidation of the same. Also, the Union said that they were not aware of demand and the reason of this action by the workers. However, it has been found that the workers belonging to seven tribes from Papua are demanding promotions in the form of incentives, as they did not take part in previous year’s labor dispute.

The company said that they are hoping the issues to be addressed and resolved with harmony, keeping in view the rights and opinions of the workers. However, the company also stated that the impact due to this roadblock is not creating a significant impact.

Grasberg prone to workers’ strife

Interestingly, it is not the first example of production being halted at Grasberg. The production at mountainous terrain of Papua has attracted labor strife in the past few years, including the strike in 2011 and a tunnel collapse in 2013. Also, in 2014, the company had witnessed disrupted exports following friction with the Government of Indonesia, over the matter of export duties.

Scott Coper

Scott Coper

Coper graduated from the University of Chicagi with majors in political science and journalism.