Freeport Smelter Funding Does Not Cost Shareholders
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PT Freeport Indonesia will rely on banking syndication to fund the construction of a copper concentrate smelter. About US $ 2.8 billion in funding needs comes from loans. The smelter investment reached the US $ 5 billion.
PT Freeport Indonesia
Commission VII of the House of Representatives (DPR) requests that bank loans not burden shareholders. As is known the Government of Indonesia through PT Inalum (Persero) has been the majority shareholder of Freeport Indonesia since 2018 yesterday through the divestment scheme.
To acquire the shares, Inalum issued global bonds worth the US $ 4 billion, because the acquisition value reached the US $ 3.85 billion for the purchase of 45.62% of Freeport shares.
"Do not let Inalum be given an additional burden during the construction of the smelter," said Deputy Chairman of Commission VII Eddy Soeparno during a hearing with Freeport Indonesia in Jakarta.
Tony Wenas
Freeport Indonesia President Director Tony Wenas said the majority of the funding for building a smelter came from bank loans. He could not disclose which banks would provide the loans. Tony only mentions 9 domestic and foreign banks committed to pouring funds up to the US $ 2.8 billion. He said the loan will not burden the shareholders.
"In 4 years the loan is paid off," he said.
Tony explained the smelter construction budget reached the US $ 600 million this year. Investment needs are increasingly soaring in the next year the US $ 1.1 billion as it enters the construction phase in August. He revealed the progress of smelter construction until the beginning of February reached 4.88%, exceeding the work plan target of 4.09%. The smelter's progress has been verified by an independent verifier.
The verification results have been submitted to the Ministry of Energy and Mineral Resources for evaluation. The 4.88% progress is in the form of land compaction and is targeted to be completed within the next three months. After that, an EPC auction is conducted to enter the construction stage. The smelter construction is targeted to be completed in 2023.
"In August 2020 we hope that construction will start," he said.
JIIPE
The smelter with a capacity of 2 million tons of copper concentrate located in the smelter is located in the Gresik industrial area, East Java (Java Integrated Industrial and Port Estate / JIIPE)
Investor Daily, Page-9, Thursday, Feb 20, 2020.
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