By Ben Otto
JAKARTA, Indonesia--Thousands of workers at Freeport Indonesia's
massive mining operations in eastern Indonesia called off a strike
Friday after the company suspended five managers in the wake of a
deadly underground accident last month, although the mining giant's
production operations remain at a standstill.
Union leaders representing three-quarters of Freeport's
workforce of more than 24,000 said earlier this week that they
would strike if the company took no action against five officials
deemed responsible for the collapse of an underground tunnel that
killed 28 miners.
Union leader Virgo Sallosa said Friday that the strike had been
canceled after Freeport said the officials wouldn't be active at
the mine site during an ongoing investigation of the accident.
In a release, the company said it had "reached an agreement"
with union leaders and that workers would return to work
maintenance activities at its mines in a remote, mountainous region
of Papua in easternmost Indonesia.
The site is home to the massive Grasberg mine, one of the
world's largest open-pit copper mines and the largest gold
mine.
Production at all mines in the area has been halted since the
accident May 14, with workers currently carrying out only
maintenance duties until investigations into the accidents are
completed. The accident occurred near Freeport's largest
underground mine in the area, outside of production areas.
Freeport initially said it was suspending production operations
out of respect for the deceased workers and that it hoped to resume
work quickly, but the government has said production can't continue
until investigations are completed, which could take months.
The company has declared force majeure to free itself from
obligations to deliver copper concentrate.
Freeport Indonesia's parent company, the Phoenix-based
Freeport-McMoran Copper & Gold Inc., said this week that the
halt was causing a production loss of 3 million pounds of copper
and 3,000 ounces of gold a day.
It has estimated lost production at 80 million pounds of copper
and 80,000 ounces of gold for the May 15-June 11 period.
Deden Sudrajat in Jakarta contributed to this story.
Write to Ben Otto at ben.otto@dowjones.com
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