Shares of Jakarta-listed oil and gas company Medco Energi Internasional soared on Monday (17/07), as it announced an acquisition of a majority stake in an Australian mining contractor. (JG Photo/Safir Makki)

Amman Mineral Seeks to Cut Staff by 20 Percent


JUNE 08, 2017

Jakarta. Indonesian miner Amman Mineral Nusa Tenggara is planning to reduce its workforce by up to 700 workers, or 20 percent of its total staff, with benefits to be offered to those who will take a voluntary resignation, a company executive and government official told reporters on Wednesday (07/06).

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

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

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

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

Production has fallen at the Batu Hijau mine due to development delay 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 labor union, confirmed the company has offered benefits for employees who volunteered to leave. Mahdi said the offer would last until the end of July.

"If [Amman] 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 tons 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.

Additional reporting and writing by Gayatri Suroyo.