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UPDATE 1-Freeport collects export permit after Pence visit
April 22, 2017 / 2:33 AM / 5 months ago

UPDATE 1-Freeport collects export permit after Pence visit

* Export permit for up to 1.1 mln tonnes copper concentrate

* U.S. VP raised Freeport dispute in discussion with Widodo

* Strike may impact Freeport’s efforts to ramp up output

* Workers concerned over future employment amid contract dispute (Recasts with permit granted, adds comments on Pence, trade ministry comment)

By Fergus Jensen and Bernadette Christina Munthe

JAKARTA, April 22 (Reuters) - Freeport McMoRan Inc collected a permit to resume copper exports from Indonesia on Friday after a hiatus of more than three months, hours after a state visit by U.S. Vice President Mike Pence, who discussed the copper miner’s dispute with Jakarta.

Indonesia’s trade ministry issued Freeport with a permit to export 1.1 million tonnes of copper concentrate up to February next year, although it was unclear how long shipments would last.

Freeport is still at loggerheads with Indonesia over rights to its giant Grasberg mine in Papua, and tensions with workers threaten to disrupt its operations further.

Indonesia halted Freeport’s copper concentrate exports in January under new rules that require the Arizona-based company to adopt a special licence, pay new taxes and royalties, divest a 51 percent stake in its operations and relinquish arbitration rights.

The dispute has cost the company and Indonesia hundreds of millions of dollars. Jakarta has said it would halt exports again if negotiations over sticking points were not resolved within six months.

Freeport has also warned Jakarta, saying it had the right to commence arbitration by June 17 if no agreement was reached.

Pence thanked Indonesian President Joko Widodo for the interim solution to the Freeport dispute on Friday but said more steps were still needed, a White House foreign policy adviser said.

“We told them that there were more steps that needed to be taken,” the adviser said, noting this was the only business issue Pence raised in his meeting with Widodo on Thursday.

ABSENTEEISM, FURLOUGHS

Tensions are rising around Grasberg after Freeport laid off thousands of workers there to stem losses from its dispute with the Indonesian government over mining rights.

Freeport warned on Friday it would punish workers for absenteeism, a day after one of the main unions announced plans to strike over employment conditions.

“Freeport Indonesia has experienced a high level of absenteeism over the last several days,” Freeport spokesman Eric Kinneberg said.

“Absenteeism is being tracked and disciplinary actions will be enforced under the terms of the Collective Labour Agreement,” he said.

Freeport had “demobilised” just over 10 percent of its workforce of 32,000 by last week, a number expected to grow until the dispute is fully resolved.

The Freeport workers’ union said the company’s efforts to reduce its workforce so far have had “extensive impacts on workers and their families”.

Workers are worried about the layoffs “because there are no limits or specific criteria on workers who will be furloughed,” the union said. It demanded an end to the furlough policy and notified Freeport of plans to strike for 30 days from May 1.

“Efforts by the company to cut costs and reduce their numbers of workers, this is what has made them feel agitated,” said Virgo Solossa, a Freeport workers’ union member told Reuters, but said many other workers would not join the strike.

Adding to tensions around Grasberg, several Freeport workers and police were injured in a clash in Papua on Thursday, when officers fired rubber bullets at demonstrators in Timika.

Timika Police Chief Victor Machbon confirmed the details of the incident and said about 1,000 demonstrators attempting to free a union leader at a court hearing had not dispersed when tear gas was fired.

According to the trade ministry, Freeport exported 1.17 million tonnes of copper concentrate to Japan, South Korea, China, India and the Philippines in 2016. (Reporting by Kanupriya Kapoor, Fergus Jensen, Wilda Asmarini and Bernadette Christina Munthe in JAKARTA, and Roberta Rampton ABOARD AIR FORCE TWO; Writing by Fergus Jensen; Editing by Tom Hogue and Paul Tait)

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