Freeport Suggests to Expand Existing Smelter
Freeport McMoRan, the holder of a 49% stake in PT Freeport Indonesia, is proposing to expand the capacity of the existing smelter and refining plant in Gresik, East Java. A proposal is a form of refusal by Freeport McMoRan to build a new smelter with an investment of US $ 3 billion.
Freeport McMoRan Chief Executive Officer, Richard Adkerson said, as an alternative to building a new smelter, it is better to expand the existing smelter and add to the precious metal factory.
Adkerson claims new smelters and expansion of existing smelters are also unable to accommodate all concentrate production in the future. As a solution, he asked the government to provide export permits for concentrates that could not be accommodated by the existing smelter to be expanded.
This has been discussed with the Ministry of State-Owned Enterprises (BUMN). If this offer is accepted, Freeport is ready to pay the duty for the export of concentrate that cannot be accommodated. According to him, this offer will benefit both parties.
"We can avoid this mega construction project and the financial benefits are very positive for the government," said Adkerson.
On the other hand. Freeport McMoRan Executive Vice President and Chief Financial Officer Kathleen Quirk said that the new smelter investment will cost more than the proposed smelter expansion. The previous estimate for the new smelter was the US $ 3 billion and the estimate for the Gresik smelter expansion for 30 percent expansion was around the US $ 250 million and the same amount was for refining precious metals, "said Quirk.
The government doesn't budge. Director-General of Mineral and Coal (Dirjen Minerba) of the Ministry of Energy and Mineral Resources (FSDM) Ridwan Jamaluddin has asked Freeport to continue building a smelter.
"Because the Law and the agreement instruct Freeport to build a smelter," he said.
Kontan, Page-8, Friday, Oct 30, 2020
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