Freeport optimistic about Grasberg labour meeting

Freeport-McMoran is optimistic that a meeting with workers, demanding fairer career opportunities, at its Grasberg mine in Papua will head off protests.

JAKARTA (Reuters) - 

Freeport-McMoran Copper & Gold said it was optimistic a meeting with disgruntled Papuan workers would head off a protest planned for Wednesday, as armoured vehicles, riot police and protesters massed outside its Papua headquarters.

Workers from the massive Grasberg mine in Papua, operated by U.S.-based Freeport-McMoran <FCX.N>, were pouring in for the protest at the offices at Timika, near the mine site, and have vowed to press ahead with a rally if Tuesday's talks fail.

The workers are demanding fair career opportunities for Papuan workers, improved recruiting and better pensions in a growing dispute that has helped push world copper prices <MCU3> to seven-month highs.

Around half a dozen armoured vehicles guarded the Freeport office in Timika along with about 200 police and military personnel armed with anti-riot gear and firearms.

"This is a surprise to us. It is just like a war. We just want to hold a peaceful rally, why do they have to deploy Panzers," said Penina Karma, secretary of Tongoi Papua, an internal group set up as a communication channel between native Papuan employees and the firm.

Indonesian police chief General Sutanto urged the workers to protest peacefully.

"It is their right to achieve their aspiration. What is important is they should do it in an orderly and lawful manner," Sutanto told reporters in Jakarta.

The mine has been a frequent source of controversy since the discovery of its massive gold and copper deposit in 1988 over its environmental impact, the share of revenue going to Papuans and the legality of payments to Indonesian security forces who help guard the site.

The meeting between the senior management and committee members of Tongoi Papua will be held at 4:30 p.m. (0730 GMT).

Mindo Pangaribuan, a spokesman for Freeport Indonesia, said the company was hopeful the meeting would resolve the dispute.

"Sure, in the past we have had a number of discussions with Tongoi Papua, we heard their aspirations and gave them feedback, we have encouraged them to take their issues to the proper channels," Pangaribuan said.

WORKERS MOVING TO TIMIKA

Frans Pigome, chairman of Tongoi Papua, said the group was demanding Freeport Chairman James Moffett and its chief executive, Richard Adkerson, take part in the meeting via a teleconference.

"We plan to have a teleconference with Adkerson and Moffett ... If they do not heed our demand as stated in the convention results, we'll go ahead with the rally," Pigome told Reuters.

"We hope the meeting will be successful. Some workers are now moving from Tembagapura to Timika. Some workers have already arrived in Timika. We expect another 15 buses of workers to arrive in Timika later today," he added.

Freeport's Pangaribuan, however, said the meeting will go ahead without the two senior executives in the teleconference.

Output of the Grasberg mine -- believed to have the world's third-largest copper reserves and one of the biggest gold deposits -- is expected to reach 1.1 billion pounds of copper in 2007, down slightly from 1.2 billion in 2006, a spokesman said.

"Any discussion about how the possible strike might affect production is speculative," Pangaribuan said by telephone.

Pigome says around 6,000 workers, mostly native Papuans, will take part in the the rally. This number will include some 2,000 workers from companies that are hired by Freeport.

Freeport Indonesia has about 9,000 direct employees.

Freeport's operations comprises some 24,700 acres in Papua and the company was conducting exploration in another 500,000 acres, according to the company's Web site.

Indonesia has large quantities of mineral resources, but foreign business executives say investment could be much higher if the regulatory environment was simplified and issues such as graft and labour laws were addressed.

Mining investment in Indonesia, which has some of the world's largest deposits of coal, copper, gold, tin and nickel, averaged $800 million annually between 2001 and 2005. (Additional reporting by Muklis Ali)

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