Freeport Boss Says Total Damage Due To Smelter Fire Reaches 100 Million US Dollars

President Director of PTFI Tony Wenas (Photo: Maria Trisnawati/VOI)

JAKARTA - President Director of PT Freeport Indonesia (PTFI) Tony Wenas revealed that the total damage caused by the fire at the smelter facility in Gresik, East Java reached 100 million US dollars. The damage was fully covered by insurance after being declared a force majeur incident.

"The total cost of damage to 100 million US dollars and fully borne by insurance and insurance letters was issued last December. We have conveyed it to the government through the Ministry of Energy and Mineral Resources," he said in a Hearing Meeting with Commission XII DPR RI, Wednesday, February 19.

Tony continued, his party is targeting the repair process to be completed in June 2025. Currently, his party has brought in a number of new equipment so that the smelter repairs can run smoothly.

"Last week, 3 Boeing 737 cargo arrived, which loaded equipment and arrived in Surabaya (with a weight of more than 30 tons. There was an Antonov plane that we rented as well, arriving at Surabaya with equipment," Tony explained.

It is planned that the commissioning and precommissioning processes of this facility will only start in mid-March until the 3rd week of June.

"We are confident that it can be completed in the 3rd week of June and start ramp up the 4th week of June with a capacity of 40 percent, August 50 percent, September 60 percent, October 70 percent, November 80 percent, only 100 percent December," said Tony.

Furthermore, Tony continued, this fire then caused a halt in production activities in the newly inaugurated smelter. With the termination of the production activities, Tony continued, the copper concentrate produced in Papua can only be processed as much as 40 percent at PT Smelting Gresik and the rest are not used or become idle.

"The amount can reach 1.5 million tons of consnetrates that cannot be processed at PT Smelting. If we value it at the current price, the value could be more than 5 billion dollars," Tony explained.

Tony continued, the potential for state revenue was reduced by 4 billion dollars or equivalent to Rp65 trillion, with dividend details of 1.7 billion US dollars or Rp28 trillion, tax of 1.6 billion US dollars or Rp26 trillion, export exit duties of 0.4 billion or Rp6.5 trillion and royalties of 0.3 billion US dollars or Rp4.5 trillion.

The impact on the regions if they do not export copper concentrate, said Tony, among others, the reduction in regional income in 2025 is estimated at IDR 5.6 trillion, with details of Central Papua Province at IDR 1.3 trillion, Mimika Regency at IDR 2.3 trillion and other districts in Central Papua at IDR 2 trillion.

Finally, the potential reduction in the allocation of PTFI's partnership funds for the community development program of US$60 million or Rp960 billion in 2025.

"In accordance with PTFI's IUPK, concentrates can be exported if there is a state of violence but it is necessary to adjust the ESDM Permen to regulate the export because of the current situation," said Tony.