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Freeport Indonesia ramping up output at world's No.2 copper mine

Workers from Freeport-McMoRan Copper & Gold Inc gather during a protest over an accident where 39 workers attending an underground training
Workers from Freeport-McMoRan Copper & Gold Inc gather during a protest over an accident where 39 workers attending an underground training

By Michael Taylor and Yayat Supriatna

JAKARTA (Reuters) - Freeport McMoRan Copper and Gold Inc was ramping up production at its Indonesian unit on Monday, a company spokeswoman said, six weeks after a deadly tunnel collapse at the world's No.2 copper mine halted operations.

Trade union workers at the Grasberg mine in remote West Papua were also returning to production work, while postponed pay talks with the Arizona-based firm have been resumed, a union official added. Freeport Indonesia employs about 24,000 workers, of which three-quarters belong to the union.

Freeport stopped production at Grasberg on May 15, a day after a training area in a tunnel caved in, killing 28 people. Planned pay talks were also put on hold last month.

On Saturday, the company said it had slowly resumed open-pit mining after receiving approval from the Indonesian government, although underground production remained closed.

"We herewith confirm that we have started to ramp up production since Saturday," Freeport Indonesia spokeswoman Daisy Primayanti said in an email on Monday. "(We) also confirm that our workers have returned to work at the production side."

Primayanti was unable to give exact details on shipments or how much of open-pit production capacity was being operated, and that this was currently being assessed internally.

The open-pit mine normally produces around 140,000 metric tons (1 metric ton = 1.1023 tons) of copper ore per day, while output from underground operations is 80,000 metric tons. Freeport was forced to declare force majeure on shipments due to the prolonged closure of the mine.

Previously, union officials had demanded that all probes into the accident be completed before production was allowed to resume, and that they wanted to evaluate the final investigation report and see if Freeport implemented all recommendations.

"Production activity at Grasberg open-pit mines have resumed and workers are back working at the mining sites," Papua-based union official Virgo Solossa told Reuters by telephone. "The union encourages the workers to go back to work."

The Freeport Indonesia management had not consulted the union when asking workers to return to their duties, Solossa said, adding that the government would be held accountable should there be any further accidents at the mining site.

The union successfully demanded the suspension of five senior Freeport employees that it suspected bore responsibility for the accident.

Relations between Freeport and the union have been strained in recent years, after a three-month strike in late 2011 and a series of minor spats.

After the May 14 tunnel collapse, the company and the union put on hold pay negotiations that began on May 13 and were forecast to last for up to 60 days.

"Union and management representatives have restarted negotiations again," said Solossa, without giving further details.

(Reporting by Yayat Supriatna and Michael Taylor; Editing by Michael Perry)

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