Freeport confirmed to MiningNews.net the incident occurred on Monday at Timika, the location where the company arranges bus transportation for workers.
The mine is 90.64%-owned by Freeport through subsidiary company PT Freeport Indonesia, with the Indonesian government holding the balance.
"We are deeply saddened that the incident resulted in one fatality and injuries to a number of PT Freeport Indonesia employees and police officers," Freeport said in a statement.
"The injured employees and officers were treated at local clinics and hospital facilities and several company vehicles were also damaged.
"We are continuing to work with the local police to deal with these acts of intimidation ... the individuals that are responsible for these illegal acts of aggression should be held accountable."
It is understood the group of striking employees marched from the union office in Timika to the bus terminal, where they intended to disrupt bus loading for PTFI employees returning to work.
"The group entered the bus terminal and police responded to remove the unauthorised entrants and the group reacted aggressively," Freeport said.
Workers at Grasberg, located in easternmost Papua province, started strike action in the middle of last month, demanding pay increases to between $17.50 and $43 an hour from the current $2.10 to $3.50 an hour as part of collective labour agreement negotiations due for renewal this month.
It is understood about 8000 of the 12,000-strong employees at Grasberg have taken part in the action, which Freeport estimated was costing about 3 million pounds of copper and 5000 ounces of gold a day in lost production.
At the time Freeport said its current quarter estimates of 940Mlb of copper and 415,000oz of gold would be "unfavourably impacted".
Last month the Arizona-based miner said it would work in good faith with union leaders and the Indonesia government-appointed mediation team to reach a new labour agreement and restore normal operations.
The package offered included a substantial increase in base compensation, an enhanced bonus program and attractive retirement benefits.
An eight-day strike also occurred in July but ended after an agreement had been reached with the PTFI union, which included negotiations for the current collective labour agreement.
Security has been stepped up at the site in recent months, following the death of two workers in April just a day after a shooting in which two people were injured.
Local police were investigating the incident and said the two men died in a burning car which at the time, Freeport said appeared to have been fired upon.
