Ministry of SOEs Optimistic about Freeport's Second Smelter Operate as Planned
13 November 2023
Gresik – Deputy Minister of State-Owned Enterprises (BUMN) of the Republic of Indonesia Kartika Wirjoatmodjo paid a working visit to the smelter construction project owned by PT Freeport Indonesia (PTFI) in the Java Integrated Industrial and Port Estate (JIIPE) Special Economic Zone, Gresik, East Java on Thursday (9/11). Kartika Wirjoatmodjo appreciated PTFI for completing more than 80 percent of the smelter construction by the end of October, according to the government's S-curve timeline target.
In her review, Kartika Wirjoatmodjo as a representative of the government said that PTFI's smelter project is fundamental to improve Indonesia's competitiveness, and reduce dependence on imports of several key materials for the Indonesian economy.
"PTFI is one of the companies that contributes the most to the country, in the form of taxes, royalties. We want Freeport's production both upstream and later in the smelter to really be as expected, including gold and other precious metals, "said Kartika Wirjoatmodjo.
PTFI continues to complete some work for the completion of physical construction by the end of December 2023, then will go through the pre-commissioning and commissioning stages to ensure the entire facility functions without problems and begin its operational activities by the end of May 2024. Once operational, this second smelter will reach full production capacity by December 2024.
On the same occasion, PTFI President Director Tony Wenas conveyed the main challenge in completing the smelter, namely project management that is not easy. "Involving so many sub-contractors, involving a lot of manpower, how to combine them so that they are inline," said Tony.
Tony added that the existence of PTFI's smelter until the third quarter of 2023 has contributed to the realization value of investment for downstream. Based on data released by the Ministry of Investment/Investment Coordinating Board (BKPM), investment realization for downstream in the mineral sector amounted to Rp151.7 trillion, of which copper contributed Rp47.6 trillion. With existing resources in Indonesia and with the investment acceleration program, Indonesia will become a player to be reckoned with in mining and downstream. "There have been many investments that want to enter Indonesia to make more value added. The demand for mining products will be higher and this is an opportunity and Indonesia will become a player to be reckoned with in the world," said Tony Wenas.
In the construction of this second smelter, PTFI has invested up to USD 2.9 billion or equivalent to IDR 43 trillion by the end of October 2023, from a total budget of USD 3 billion. Once fully operational, the smelter will be able to process copper concentrate with a production capacity of 1.7 million dry metric tons (dmt) and produce copper cathodes of up to 600,000 tons per year.
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