The Construction Of The Freeport Smelter Project In Gresik Is 80 Percent

Deputy Minister of SOEs Kartika Wirjoatmodjo. (Photo: Mery Handayani/VOI)

JAKARTA - The construction of the PT Freeport Indonesia (PTFI) smelter in the Java Integrated Industrial and Port Estate (JIIPE) Special Economic Zone, Gresik has reached 80 percent as of the end of October 2023.

The development of this smelter development is in accordance with the target of the curvature-S timeline from the government.

PTFI has also completed several works to complete physical construction at the end of December 2023, then will go through the stage and start operational activities at the end of May 2024.

After operating, this second smelter will reach full production capacity by December 2024.

"PTFI has completed more than 80 percent of the smelter construction as of the end of October, according to the target of the curvature-S timeline from the government," said Deputy Minister of State-Owned Enterprises (BUMN) Kartika Wirjoatmodjo in an official statement, written Friday, November 10.

Tiko, Kartika's nickname, said that the PTFI smelter project is very fundamental to increase Indonesia's competitiveness, and reduce dependence on the import of some of the main materials for the Indonesian economy.

PTFI is one of the companies that contributes the largest to the country, in the form of taxes, royalties. We want Freeport's production both upstream, and later on the smelter to really match expectations, including gold and other precious metals," he said.

On the same occasion, PTFI President Director Tony Wenas conveyed the main challenge in completing the smelter, namely a management project that is not easy.

"Regarding so many sub-contractors, it involves a lot of workers, how to combine them so that they are inlined," said Tony.

Furthermore, Tony said that the existence of the PTFI smelter until the third quarter of 2023 had contributed to the value of investment realization for downstreaming.

Based on data released by the Ministry of Investment/Investment Coordinating Agency (BKPM), investment realization for downstreaming in the mineral sector is worth IDR 151.7 trillion, where copper contributes IDR 47.6 trillion.

With existing resources in Indonesia and with an investment acceleration program, Indonesia will become a player who is taken into account in mining and downstreaming.

"There have been many investments that want to enter Indonesia to make value added which will be even more. The demand for mining products will be higher and this is an opportunity and Indonesia will be a player to be reckoned with in the world," said Tony Wenas.

In the construction of this second smelter, PTFI has also invested up to the pre-commissioning and commissioning stage to ensure that all facilities function without US constraints or equivalent to IDR 43 trillion as of the end of October 2023, out of a total budget of 3 billion US dollars.

After fully operational, this smelter will be able to process copper concentrate with a production capacity of 1.7 million dry metric tons (dmt) and produce a copper cathode of 2.9 billion dollars to 600,000 tons per year.