Coordinating Minister Airlangga Reveals Gresik SEZ Will Produce 60 Tons Of Gold Per Year

Coordinating Minister for Economic Affairs Airlangga Hartarto revealed that the Gresik Special Economic Zone (SEZ) is ready to produce 60 tons of gold per year.

Airlangga explained that the Gresik SEZ will focus on downstreaming copper, including the production of gold end products. So far, Indonesia has not been able to produce gold end products even though PT Freeport Indonesia has been operating since 1967.

Airlangga said, this condition is the first time, because since 1967 Indonesia has only been able to export nearly 30 million tons of copper to Spain and Japan to be processed into gold bullion.

"You can imagine from 1967 to 2024, from Freeport, we produce gold close to zero. So copper production can produce 30 tons, so 30 tons is divided between Spain and Japan. So this time for the first time in Gresik, 60 tons of gold (per year) can be produced in Gresik," he said at the Indonesia SEZ Business Forum 2024 event, Monday, December 9.

In addition, Airlangga said that with gold production capabilities reaching 60 tons per year and the presence of gold stocks in PT Pegadaian weighing 70 tons, Indonesia will become the main country that produces gold in the future and there is no reason not to create its own gold bank or bullion bank.

"So, Indonesia, through OJK, is also developing what we call a bullion bank. A bank that can assess gold stocks. In the past, gold stocks were only stored in warehouses. We only recorded tonnage, not its value. Other banks, including in Singapore, many of them put their gold in the balance sheet," he said.

Airlangga revealed that Indonesia will have a gold bank and has been proposed to the Financial Services Authority (OJK) so that PT Bank Rakyat Indonesia (Persero) Tbk or BRI and PT Bank Syariah Indonesia Tbk or BSI as managers.

"So, I think this is the beginning of several banks that will become bullion banks. I propose to OJK, at least BRI, which is a shareholder of Pegadaian, as well as Bank Syariah Indonesia, must be able to become a bullion bank in Indonesia," said Airlangga.

According to Airlangga, gold is part of a safe haven in times of crisis, therefore, Indonesia must be able to manage its gold assets independently at the bank's bullion.

"We know that gold is part of a safe haven investment in times of crisis. And in the last five years, we have experienced many crises. I don't think it's wise if we don't take advantage of our own strengths," he said.