Freeport Indonesia Inaugurated New Copper Smelter

Feb 2024

Indonesia recently inaugurated Freeport’s expanded copper smelter in Gresik, East Java, coinciding with the government’s forthcoming permanent ban on copper concentrate exports. The USD 250 million project bolsters the processing capacity of Smelting, a company jointly owned by the local unit of US mining giant Freeport and Japan’s Mitsubishi Materials.

Now capable of handling 1.3 million tons of copper concentrate, the smelter’s output of 300,000 tons of copper cathode annually is essential for various sectors, including electronics and telecommunications.

Freeport’s collaboration with Mitsubishi underscores the companies’ goals to advancing downstream industries in Indonesia. This aligns with Freeport’s obligation to expand processing capacity as per export and mining permit extensions.

Initially considering a permanent copper concentrate export ban in line with previous mineral export restrictions, Jakarta now aims to boost the domestic minerals processing industry. Relaxing the ban temporarily for Freeport and local mining company Amman Mineral Internasional until their smelters are complete.

Freeport’s investments extend beyond Gresik, including the Manyar smelter at the Java Integrated Industrial and Ports Estate, capable of processing 1.7 million tonnes of copper concentrate, and a USD 575 million precious metals refinery. Negotiations are ongoing to increase the government’s stake in Freeport Indonesia, potentially facilitating a 20-year extension to Freeport’s mining rights in Grasberg.

State Enterprise Minister hinted at further smelter developments, possibly in Fakfak regency, West Papua. These initiatives underscore Indonesia’s aspirations to advance its minerals processing capabilities and move up the value chain, aligning with global trends in electric vehicles and renewable energy technologies.

(Source: Nikkei Asia)

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