Jakarta, CNBC Indonesia – PT Freeport Indonesia (PTFI) revealed that the company has carried out its commitments as stated in the Special Mining Business Permit (IUPK) which was signed in 2018.
This IUPK is a replacement and extension of the operational period from the previously applicable Work Contract (KK) regime.
The commitment in question is primarily related to the construction of a new copper processing and refining facility (smelter), so that all of PT Freeport Indonesia’s copper concentrate processing results can be refined domestically into copper cathodes. This means that the company no longer exports raw or semi-finished materials abroad.
President Director of PT Freeport Indonesia Tony Wenas said that Freeport’s obligation to fulfill the commitments in the IUPK has been proven by the construction and even operation of a second smelter in the Java Integrated Industrial and Ports Estate (JIIPE) area, Gresik, East Java. Even before this, the company had also carried out its other commitment, namely divesting 51% of its shares to Indonesia and this was realized in 2018 through the release of Freeport-McMoran shares to Indonesia through the MIND ID Mining BUMN Holding.
As is known, on Monday (23/09/2024) the first copper cathode production was inaugurated from PTFI’s second smelter, which was also witnessed by President Joko Widodo (Jokowi). The smelter at JIIPE Gresik is predicted to be a copper smelter single line the largest in the world, with a copper concentrate processing capacity of 1.7 million tons per year.
“Well, this second smelter is an obligation in PT Freeport Indonesia’s IUPK which was issued in 2018 as a result of quite long negotiations with the government where the government hopes that there will be two main points, namely the 51% divestment that occurred in 2018 and also the construction of another new smelter. And this finally happened, this is like us fulfill our obligation like that. “In accordance with the IUPK,” explained Tony in the CNBC Indonesia Mining Zone Program, quoted Thursday (10/10/2024).
Tony said that currently the smelter’s copper cathode production is progressing in stages and is expected to be fully operational in December 2024 or January 2025.
“We have started production, then we will gradually increase it until December 2024. So that from early January 2025 we will be at full capacity for production,” he said.
Together with the first smelter managed by PT Smelting, these two facilities will refine a total of 3 million tons of copper concentrate per year, and produce 1 million tons of copper cathode, 50 tons of gold and 200 tons of silver per year.
Starting next month, he continued, his party will start producing gold from the Precious Metal Refinery (PMR) facility which is also part of this “giant” smelter. Around 50-60 tons of gold will be produced from the gold factory.
“And in the meantime, in addition to copper, we will produce gold. We will start production of approximately 50-60 tonnes of gold next month, end of this month or next month,” he said.
He explained that the operation of this “giant” copper factory would have a positive impact on the Indonesian economy, especially paving the way for the creation of downstream industry in the country.
According to him, the amount of PTFI’s copper cathode production from its two smelters can be used to supply the need for copper cathodes to build new renewable energy power plants, such as solar power and hydropower.
“1 million tons of copper cathode can be used to build 200 Giga Watt (GW) of solar panels. To build a wind farm that’s 600 GW a year, you know. And to build a water power plant it can be 800 GW. So the availability of copper cathodes in “There are many needs in this country. Finally, one of them is the electric vehicle battery ecosystem,” he explained.
As is known, the cumulative investment value for this project which occupies 104 hectares of land reaches US$ 3.7 billion or the equivalent of Rp. 58 trillion.
Around 100 thousand copper cathodes from the PTFI smelter are targeted to be absorbed by PT Hailiang Group, a copper foil company which will also build a factory in the JIIPE area, Gresik.
Meanwhile for gold, around 20 tons of gold from this smelter will be absorbed by PT Aneka Tambang Tbk (ANTM).
(knows)
Watch the video below:
Video: Freeport Becomes the Largest Upstream-Downstream Copper Mine in the World
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