Government Adds 10 Percent Of Shares In Freeport Efforts To Support Downstream

Illustration (Photo: Doc. ANTARA)

JAKARTA - Investment Minister/Head of BKPM Bahlil Lahadalia said the government's plan to increase share ownership by 10 percent in PT Freeport Indonesia (PTFI) as well as extend the company's Special Mining Business License (IUPK) contract until 2061 is an effort to support downstreaming.

Bahlil said the purchase of government shares in PTFI was in line with the government's policy to build downstreaming in Indonesia, especially in the electric vehicle ecosystem.

In addition, according to him, by owning larger shares, the government will also benefit from the amount of dividends.

"Now Freeport has become a company owned by the Indonesian government, because we are already in the majority. We bought approximately US$4 billion. And from that income, now the 2024 dividend has almost been paid off with that income," said Bahlil as quoted by ANTARA, Friday, May 3.

He also mentioned that with the majority share ownership in PTFI, the government can also more easily implement downstream policies, especially in copper commodities.

Bahlil told about the construction of the PTFI smelter in Gresik, East Java, which was finally running due to a strong push from the government.

"3 billion US dollars to build a smelter in Gresik. Now it's finished, in May (operating), and there we can already produce copper cathode. Of the 3 million concentrate brought from Timika to Gresik, it produces 400 thousand tons of copper cathode, 60 tons of gold," he said.

On that occasion, Bahlil also said that PTFI's contract extension could not be separated from the company's plan to produce copper wires. Copper wire is a copper derivative product that can generate a value of 24 times.

Bahlil said that by producing copper wires, Indonesia will be closer to realizing the industrial ecosystem of electric vehicles from upstream to downstream in the country.

"Well, if the copper is there, we will build a car factory. Copper wire is a pack for batteries, so we build an ecosystem for all in Indonesia, so that we become a world-classized producing country," he said.

In addition, Bahlil reiterated the direction of government policies related to downstreaming. The state must have a clear policy direction.

He also reminded Indonesia not to repeat the same mistakes by simply exploiting raw commodities.

"We once had oil wealth. We have been included in OPEC. Now we are no longer included in OPEC, why? Because our oil consumption is 1 million 500 thousand barrels per day. Our production is only 625 thousand barrels per day. Our imports are 870 thousand barrels per day. We are now importing oil," he continued.

According to him, this happened because of a wrong policy.

For this reason, he said, the government needs to change the policy direction by building downstreaming.

The goal is to accelerate national economic growth and create quality job opportunities.