No Relaxation for Freeport
Freeport's request to postpone the completion of the smelter was not approved by the government.
Grassberg Gold Mine PT Freeport Indonesia (PTFI)
PT Freeport Indonesia (PTFI) has asked the government that the copper refining plant or smelter, which originally had to operate in 2023, is postponed to 2024. This is because the building contractors said they could not build a smelter if pressed in 2023.
PTFI Deputy President Director Jenpino Ngabdi explained that currently, the smelter construction progress is still 5.86 percent. In fact, it should have entered the second semester of this year, the smelter construction target was 10.5 percent.
"The results of verification of smelter progress until July 2020 are physically 5.86 percent of the 10.5 percent plan. This verification was carried out by Surveyor Indonesia. From the already carried out the feasibility study, the pre-project planning or front end engineering design (FEED) has been completed and the land compaction has also been carried out, "said Jenpino at Commission VII of the Indonesian House of Representatives.
Jenpino explained because the impact of Covid-19 has made development progress slow. He explained that PTFI's contractor vendors had difficulty in mobilizing mass and goods because of Covid-19. This has resulted in no activity in the smelter construction for the past six months.
"Our vendors and our engineering, procurement, and construction (EPC) contractors are currently not finalizing. They have constraints due to restrictions in their country because of this outbreak. So difficult for them. There are vendors that are already active, some are not. Hence, the EPC costs are not final, "said Jenpino.
PTFI President Director Tony Wenas also said that the construction of a copper refining plant or smelter was not profitable for the company or the state. This is because the added value of the selling price from concentrate to cathode copper is only five percent.
Tony explained that the added value of only five percent is not proportional to the selling price if it is exported and the spending that must be spent by the state and companies. Even so, Tony said that because it was already in the work contract transfer, it would still be carried out.
The Ministry of Energy and Mineral Resources (ESDM) has yet to give approval for PTFI to postpone its smelter operational schedule. The government still believes that PTFI's smelter can still be completed on time.
Director-General of Mineral and Coal at the Ministry of Energy and Mineral Resources Ridwan Djamaludin said that currently, PTFI's smelter construction progress was only 5.86 percent because the pandemic had practically been in six months for PTFI not to carry out any development activities in Gresik, East Java.
"Indeed, when viewed from the target, it is still below the target. Currently, the land has been resolved but there are obstacles. However, we will still adhere to the applicable laws (UU), "said Ridwan.
Regarding this smelter, Commission VII of the Indonesian House of Representatives. is also united to urge the Ministry of Energy and Mineral Resources not to provide the slightest relaxation for PTFI. Hearing this, Ridwan at the end of the meeting said he would stick to the rules and agreements that apply.
Deputy Chairman of Commission VII Commission VII of the Indonesian House of Representatives. RI Eddy Soeparno explained that the construction of a PTFI smelter is not just a discourse. The smelter is part of an important agreement between the two countries. He urged the government not to give PTFI permission to postpone the smelter construction target.
PTFI has promised that when it is granted an extension to the Grasberg mine management contract, by changing the type of contract from a work contract (KK) to a special mining business permit (IUPK), which is to complete the construction of the designated smelter, namely in 2023.
Republika, Page-5, Friday, August 28, 2020
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