Freeport McMoRan Copper & Gold's Indonesia mine workers have given the company a deadline of midnight on Wednesday to come up with a fresh pay rise offer, or they will proceed with a month-long strike, union official Virgo Solossa told Reuters.
It would be the second strike in three months at Freeport Indonesia's Grasberg mine, the world's third-biggest copper mine and with the world's largest gold reserves.
The strike, if it goes ahead, would be longer and more costly than the previous eight-day strike in July, when the firm said it suffered a production loss of 35 million pounds of copper and 60,000 ounces of gold.
The strike in Indonesia's remote Papua region would follow a planned strike on Wednesday at another Freeport-controlled mine, Cerro Verde in Peru.
The company's union in Indonesia, which represents about 8,000 workers, have demanded a pay rise to between $17.5 to $43 per hour, down from initial demands for $30 to $200 per hour, but still above a current $1.5 to $3 per hour rate. The union had said that other Freeport workers worldwide get 10 times their current level.
We are flexible, and we would see if the company would offer us a package closer to what we want, but there's no movement from the management side until now, so it seems that the strike will go ahead, Solossa told Reuters.
The management has until midnight to give us a fresh offer closer to our demand, he added.
The firm on Monday offered a double salary for the month in which the management and workers could agree on a new pay package, but Solossa said the union has rejected it, calling it cash to stop us from yapping.
Freeport Indonesia's spokesman Ramdani Sirait told Reuters on Wednesday: The management has good faith to continue the negotiation and the laws give room for the parties to continue the talks.
London copper futures rallied to near four-month highs above $9,900 a tonne in August on strike action in a copper mine in Chile.
Three-month copper on the London Metal Exchange shed almost 1 percent to $8,685 a tonne by 0716 GMT, losing their early upward momentum, after the euro slid as investors fretted over the slow handling of Europe's sovereign debt problems. Prices touched a record high above $10,000 in February.