Indonesian mine declares force majeure

Freeport-McMoRan, owners of the strike-plagued giant Grasberg copper and gold mine in Indonesia, said it can no longer guarantee delivery of supplies.The announcement comes amid a worsening security situation in the remote eastern Indonesian Papua province.A statement by its Indonesian unit said it \"has declared force majeure on shipments of concentrate under sales agreements from its Grasberg mine\" because of a strike by workers at the site.\"Lower concentrate production has impacted our ability to fully perform our sales commitments and as a result, we were required to declare force majeure on the affected concentrate sales agreements,\" PT Freeport Indonesia spokesman Ramdani Sirait said.PTFI has been working with customers to reschedule deliveries since the strike began Sept. 15, he said.The union wants a five-fold pay increase on their wages of $3.50 per hour at the open pit mine. It forms a 1-mile-wide crater and is the world\'s third largest producer of copper. The low-cost labor setup has around 20,000 employees.The union says the increase would put the Papuan workers\' pay in line with that of other PTFI mine-workers around the world.Production at the mine is down around 15 percent since the beginning of year. The company said it expects to lose 100 million pounds of copper and 100,000 troy ounces of gold output this year because of the strike.Indonesian police and security forces are grappling with a deteriorating security situation in the province where a pro-independence Papuan group claimed responsibility for the killing of a sub-district police chief this week.His death comes after three people were killed near the Grasberg mine by unidentified gunmen, the state news agency Antara reported. One of the dead was a contract worker who had worked at the mine for 20 years.The province is the country\'s poorest region and ethnically separate from the rest of the Indonesia.Papuans are ethnically Melanesian and closer to Australia\'s aborigines than the Asians who make up most of Indonesia\'s population. Papuans say their culture and identity is being eroded by an influx of Asian Indonesians.The province is about the size of Spain and occupies the western half of the island of Papua. Papua New Guinea occupies the eastern half.Papua has been a part of the Indonesian archipelago federation since the Dutch gave up their colonial rule and a slim majority in a controversial referendum in 1969 voted in favor of joining. Since then various separatist movements have been pushing for independence.A shootout at the mine by suspected members of the Free Papua Movement in July 2009 left three people dead, including Australian technician Drew Grant, 29, a project manager at the mine. He was killed when the vehicle he was driving was ambushed.FPM denied it was involved.In the latest killing, Cmdr. Dominggus Awes was attacked by two men at the Mulia Airport and killed with his own handgun, a report in the Jakarta Globe newspaper said.\"We received a letter claiming to come from the OPM, Free Papua Organization, that claimed responsibility for the shooting of the sub-district police chief,\" Puncak Jaya Police Chief, Cmdr. Alex Korwa said.\"But I still doubt this,\" he said. OPM\'s armed wings were split into a number of uncoordinated groups and anyone could claim responsibility.The head of the Papuan People\'s Representative Council, John Ibo, claimed that 80 percent of Papuans wanted to secede from Indonesia, the Globe reported.Every new injustice and conflict in the region only served to strengthen pro-independence sentiment, Ibo said.If the government wants to curb separatism it should promote sustainable development in Papua and it should avoid repressive measures, prioritizing dialogue instead.\"Treat Papua as a complete entity, as part of the Indonesian nation that also needs attention,\" he said.