Concentrat Export Relaxation Is Worried About Downstreaming

Energy economic observer at Gadjah Mada University (UGM) Fahmyani is worried that the relaxation of concentrate exports proposed by PT Freeport Indonesia (PTFI) will disrupt the downstream program being promoted by the government. "If the government fulfills these demands, then President Joko Widodo's (Jokowi) flagship downstream program will be destroyed. Even though the noble goal of Jokowi's program in downstreaming is to increase added value and develop an industrial ecosystem," Fahmy said as quoted by ANTARA, Wednesday, October 25.

Fahmy assessed that granting licenses to relax concentrate exports would eliminate opportunities for Indonesia to increase the added value of downstream products.

The relaxation of concentrat exports will also lead to discrimination against nickel and bauxite entrepreneurs who have been required to downstream domestic smelters, so they will demand similar export relaxation.

Therefore, Fahmy asked the government not to give export licenses to concentrate proposed by Freeport.

"Jokowi's government should not have to be afraid of the chili strikes made by Freeport. The government must be consistent with the policy of prohibiting concentrat exports, and consistently implementing downstream programs to increase added value and build an industrial ecosystem," he said.

It is known, PTFI again proposed an extension (relaxation) of exports of copper concentrate and anoda mud to the Manyar smelter in Gresik, East Java fully operational by the end of 2024.

The construction of the Manyar smelter is targeted to be completed by mid-2024, followed by a trial (commissioning) of facilities and a schedule for increased production (ramp-up) until the end of 2024.

In fact, the government had previously granted permission to extend the export concentrate of PTFI, which was supposed to end in June 2023, to be extended until May 2024.

PTPI requested a permit to relax concentrat exports because currently the progress of the construction of the PTFI Manyar copper smelter in Gresik has only reached around 84 percent.

Fahmy noted that since 2014 more than eight relaxation permits have been granted to Freeport.

"Every time a concentrat export relaxation permit is granted, Freeport always breaks its promise to complete the smelter construction on time," he said.