Freeport Indonesia exceeds East Java smelter progress targets

PT Freeport Indonesia’s chief executive told a parliamentary committee in Jakarta that the company has not only exceeded progress targets on its copper concentrate smelter in Gresik, East Java, Indonesia, but he also expects construction of the facility to begin in August.

“The progress is now at 4.88 per cent, exceeding our six-month target of 4.09 per cent,” Tony Wenas, chief executive of PT Freeport Indonesia, a unit of Freeport-McMoran Inc., said in a hearing with Commission VII at the House of Representatives.

Front-end engineering and design for the $3 billion smelter has been concluded and ground preparation is expected to finish in around three months. Mr Wenas said that the company hoped to start construction in August.

Construction of a smelter is part of Freeport-McMoran’s deal with the Indonesian government to maintain its mining rights at Grasberg – the world’s second-biggest copper mine – until 2041, and the U.S.-based company has said it is committed to building one by the end of 2023.

The smelter is expected to consume 2 million tonnes of copper concentrate a year and produce between 500,000 to 600,000 tonnes of copper cathodes annually. The new plant will add to its existing smelting output of 300,000 tonnes of cathodes a year.

Mr Wenas said the company is in talks with nine banks to secure $2.8 billion in loans to help finance the construction.

Meanwhile, the company has started to transition to underground mining at Grasberg in Indonesia’s Papua province, which is expected to affect its copper output. The mine’s output for 2020 is expected at around 50 per cent of its “normal level” of roughly 210,000 tonnes of ore per day, with output to return to normal in 2022.

Freeport Indonesia expects to produce more than 1 million tonnes of copper concentrate this year, spokesman Riza Pratama said.

Sources: www.reuters.com; jakartaglobe.id