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Freeport shifts focus to smelter construction after reaching divestment deal

Jakarta Post - September 28, 2018

Jakarta – After reaching a divestment deal on Thursday, gold and copper miner PT Freeport Indonesia (PTFI) will now focus on a smelter construction plan, which is required for the company to obtain the special mining permit (IUPK) that is needed to operate the Grasberg gold and copper mine in Papua.

"The smelter is part of our agreement. So if the divestment is completed, we will turn to [smelter] construction," PTFI vice president of corporate communications Riza Pratama said in Jakarta on Thursday as reported by kompas.com.

He said PTFI had showed a commitment to constructing a smelter through engineering design and land preparation processes at the planned location of the smelter in Gresik, East Java.

After years of negotiations, Indonesia signed on Thursday an agreement with American mining giant Freeport-McMoRan Inc. (FCX), on the purchase of a majority stake in PTFI, which operates the gold and copper mine.

To conclude the deal, however, state mining holding PT Indonesia Asahan Aluminium (Inalum), which represents the government in the talks, needs to settle a payment of US$3.85 billion to FCX and Rio Tinto Group within six months.

The planned smelter in Gresik would manufacture 60 percent of the total copper concentrate mined from Grasberg, while another 40 percent would be manufactured at the existing smelter in Gresik.

When asked if PTFI would continue with the plan to construct a smelter in Sumbawa, West Nusa Tenggara, Riza said it was still in the works.

The company is currently assessing the feasibility of constructing a smelter on the island. (bbn)

Source: http://www.thejakartapost.com/news/2018/09/28/freeport-shifts-focus-to-smelter-construction-after-reaching-divestment-deal.html