Ahead Of Taking Control Of 61 Percent Of Freeport Shares, The Government Asks PTFI To Build Smelters In Timika

Illustration - PT Freeport Indonesia Worker. (Photo: Doc. ANTARA)

JAKARTA - Minister of Investment/Head of the Investment Coordinating Board (BKPM), Bahlil Lahadalia said that the smelter of PT Freeport Indonesia (PTFI) with an investment value of 3 billion US Dollars located in Gresik, East Java, will start operating on July 1, 2024.

"Starting next July 1, Freeport will process the copper concentrate from Timika in Gresik. In one year, the factory will produce 60 tons of pure gold, 400,000 tons of copper cathode, and various other derivative products," Bahlil said as quoted on Sunday, June 2.

Bahlil continued, currently the Indonesian government is also encouraging PTFI to build a smelter in Timika, Central Papua, close to the Freeport mine.

This request is in line with the government's plan to increase the number of shares owned by Indonesia in PTFI to 61 percent in 2041.

"We are thinking about it, once the rules come out, we will acquire another 10 percent of the shares. Now we are 51 percent, we want Indonesia to have a majority more, negotiations have been completed and Freeport agrees to add 10 percent shares in 2041 and above," he said.

According to Bahlil, the construction of the smelter and the divestment process of Freeport shares is part of the government's downstream program, which is one of the investment strategies carried out by the state to create jobs in the future.

The world is currently talking about green energy and green industry. 2035 peaks in demographic bonuses, 65 percent of Indonesians are of productive age. And therefore we must design from now on so that our nation does not become a consumptive country," he added.

Bahlil gave an example, Indonesia's nickel reserves reached 25% of the world's total nickel reserves, so the government decided to stop exporting nickel ore in 2019. This policy succeeded in providing added value to the Indonesian economy.

"Our export value for nickel is only 3.3 billion USD in 2017. Once we stop exporting raw materials, we build the industry, we build factories in Indonesia, what will happen in 2023 the increase will be 33.5 billion USD or almost 500 trillion rupiahs," he added.

Furthermore, Bahlil said, many developed countries were unhappy with Indonesia's policy of banning the export of nickel ore. In fact, Indonesia was sued by the European Union at the World Trade Organization (WTO) regarding the policy.

"They are afraid that our country will be strong. And I am still sure that there are some other countries that do not want Indonesia to be sovereign in managing their own wealth," he concluded.