Jokowi Says Freeport Smelter In Gresik Is The Biggest In The World, Faisal Basri: So What? There Are Benefits For The State?

Indef's senior economist, Faisal Basri. (Photo: Doc. Antara)

JAKARTA - University of Indonesia (UI) senior economist Faisal Basri responded to the government's move to build a PT Freeport Indonesia smelter in Gresik, East Java. He questioned what the benefits of the world's largest smelter were for the country and the people of Indonesia.

"Pak Jokowi said today that Indonesia will have the largest copper smelter plant in Gresik in the world, so what? If it's the largest, what do you want? What are the benefits for the country?" Faisal said in a virtual discussion, Tuesday, October 12.

As is known, President Joko Widodo or Jokowi inaugurated the groundbreaking ceremony for the construction of the PT Freeport Indonesia smelter in the Special Economic Zone (SEZ) Gresik, East Java, this morning.

Faisal assessed that Jokowi's statement was exactly the same as when touting the greatness of Indonesia's exports in the iron and steel sector, which this year until August 2021 rose by 95 percent.

"This is exactly like Pak Jokowi's claim that during the 100 Economist meeting, he was proud of the growth of iron and steel exports, which rose 95 percent this year until August. This is great," he said.

However, Faisal reminded the public that these kinds of iron and steel are exported by Indonesia to other countries. Starting from the added value is very low to very high.

"Well, what does iron and steel contain? Most of it is ferronickel and nickel peak iron whose added value is still very low, around 25 percent on average," he said.

According to Faisal, most of these commodity exports are for China. Based on data from the Chinese authorities, the total imports of these products in 2020 reached 309.9 thousand tons. However, Indonesia actually recorded exports of only 279.2 thousand tons.

"Calculate again how much is the loss and 100 percent is exported to China. We don't use anything of this. We don't use it to support industry in Indonesia, so to support industrialization in China. Because of our generosity," he said.

Previously, President Joko Widodo or Jokowi inaugurated the laying of the first stone or groundbreaking for the construction of the PT Freeport Indonesia smelter in the Special Economic Zone (SEZ) Gresik, East Java. This smelter can process 1.7 million tons of mine concentrate per year.

"Earlier we received a report that the smelter to be built with a single line design is the largest in the world because it is able to manage 1.7 million tons of copper concentrate per year. Or 480 thousand tons of copper metal," he said at the groundbreaking of the smelter in the Special Economic Zone (KEK). ) Gresik, Gresik Regency, East Java, Tuesday, October 12.

With downstream mining, Jokowi said, smelters could produce an average of 35 tons of gold per year with a transaction value of IDR 30 trillion. Mining products from Freeport are also said to produce copper cathodes, as well as a precious metal refining facility that produces silver.

In addition, Jokowi explained that the construction of the PT Freeport Indonesia smelter in the Gresik SEZ is a government step to provide added value for the country. So, Indonesia will no longer export raw goods.

"Don't let us own the mine, we have the concentrate, the smelter, the downstream is in other countries, as the Minister said earlier in Spain, Japan, the added value means those who enjoy them. This is why the PT Freeport smalter was built domestically, namely in Gersik, East Java province," he said.