June 7, 2017 / 10:59 AM / 7 months ago

Indonesia's Amman Mineral seeks to cut workforce by up to 20 pct

JAKARTA, June 7 (Reuters) - Indonesian miner Amman Mineral Nusa Tenggara is planning to reduce its workforce by up to 700 workers, or 20 percent, offering benefits to those that voluntarily resign, a company executive and government official told reporters on Wednesday.

Amman is a unit of oil and gas company Medco Energi Internasional, which bought the Batu Hijau copper mine in West Nusa Tenggara from Newmont Mining Corp last year.

“We are reviewing our manpower so we can be more efficient going forward,” said Rachmat Makkasau, chief executive of Amman.

Fellow copper miner, Freeport-McMoran’s Indonesian unit, has already laid off some workers due to a contract dispute with the Indonesian government and a prolonged strike at its giant Grasberg mine.

Bambang Gatot, Indonesia’s director general of coal and minerals at the mining ministry, said that Amman has informed the government of its plan to offer voluntary resignation to 500-700 employees while production is low.

Production has fallen in the Batu Hijau mine due to a delay in development in the mine, Gatot said. According to Medco, the mine produced 240 million pounds of copper and 0.3 million ounces of gold in 2015.

Gatot said when Amman’s smelter project is completed, the miner would hire more workers.

Petrus Mahdi, secretary general of Amman’s labour union, confirmed that the company has offered benefits for employees who volunteered to leave. Mahdi said the offer would last until the end of July.

“If (the firm) starts to force people to quit, then we will stand up for them,” he said.

The union said Amman currently employs around 3,500 people.

Gatot said in March that Amman has committed to invest $9.2 billion to expand its business, including the construction of a new copper smelter near its mine.

Makkasau said the company is currently conducting a study for a smelter with the capacity to process 2 million tonnes of copper concentrate.

He denied media reports that Amman is in talks with Freeport Indonesia to jointly build a smelter, although saying the firm is open to possibility of partnering with anyone.

Freeport, the world’s largest publicly traded copper miner, started laying off workers in February amid an escalation of a mining contract dispute with the government.

In late May, it said approximately 4,000 striking workers at Grasberg mine have been deemed to have resigned due to failure to report for work. (Reporting by Wilda Asmarini; Additional reporting and writing by Gayatri Suroyo; Editing by Tom Hogue)

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