Rabu, 21 Juni 2023

Accompanying President Joko Widodo's Visiting World's Largest Copper Smelter Project, Minister of Investment Oversees Freeport Downstreaming to Completion

Gresik, June 21st, 2023 – During the working visit to Gresik, East Java, yesterday afternoon (20/6), President Joko Widodo accompanied by the Minister of Investment/Chairman of Indonesia Investment Coordinating Board (BKPM) Bahlil Lahadalia, inspected the development progress of PT Freeport Indonesia's (PTFI) smelter, which is planned to become world's largest single-line copper smelter. Several members of the Indonesian Cabinet were also present during this working visit, including Coordinating Minister for Maritime Affairs and Investment Luhut Binsar Pandjaitan, Minister of Energy and Mineral Resources Arifin Tasrif, Minister of State-Owned Enterprises Erick Thohir, Cabinet Secretary Pramono Anung, and Governor of East Java Khofifah Indar Parawansa. President Jokowi and the delegation toured to see the project's development progress, guided by the President Director of PTFI Tony Wenas.

During the inspection, President Jokowi expressed his appreciation for the smelter's construction progress which has reached 72% completion and is targeted to be finished before May 2024. President Jokowi emphasized that the output from the smelter should be integrated with other mining commodities scattered across various regions in Indonesia and processed into value-added end products such as electric vehicles (EV) and EV batteries.

"So, in the future, we'll have our advantage. Our competitiveness is there. This smelter lays the foundation for us to become a developed country, as we will no longer rely on consumption but on production," Jokowi stated at the project site.

Supporting President's statement, Minister Bahlil Lahadalia also emphasized that downstreaming is the key to transforming Indonesia from a developing country to a developed country. One step towards this transformation is the downstreaming of mineral resources, such as copper which is processed in PTFI's smelter. Furthermore, the investment value for this project has reached US$2.2 billion (IDR 33 trillion) as of May 2023, out of a total investment of US$3 billion (IDR 45 trillion), and it has employed 15,000 Indonesian workers.

"Through this smelter project, we are conducting downstreaming to create added value. We want Indonesia to be known not only for its natural resources but also for its products. It has been proven that downstreaming natural resources can increase state revenues. Nickel, for example, surged from US$3.3 billion to US$30 billion after we stopped nickel exports and began downstreaming," said Bahlil.

The President Director of PTFI Tony Wenas revealed the smelter project is Freeport Indonesia's contribution to the mining downstream initiative that is in line with the Indonesian government's focus on encouraging economic transformation through downstreaming. Moreover, Tony stated that Indonesia has abundant resources to supply concentrates to Gresik, where the concentrates will be purified into copper cathodes, gold bars, and silver bars. Once operational, the smelter will produce 600,000 tons of copper, 50 tons of gold, and 210 tons of silver annually.

"Copper is used for various purposes, primarily for electricity conductors, including for electric vehicles. Copper is very promising in the future, Indonesia is very fortunate to be one of the main copper players," Tony explained.

The PTFI smelter project is located at the Java Integrated Industrial and Ports Estate (JIIPE) within the Gresik Special Economic Zone (SEZ) in Gresik Regency, East Java. The construction of the PTFI Smelter in Gresik began in 2021, marked by President Jokowi's groundbreaking ceremony on October 12, 2021. The project includes a copper smelter with a capacity of 1.7 million tons per year and a precious metal refinery (PMR) with a capacity of 6,000 tons per year. The end products include copper cathodes, pure gold, and silver bars, platinum group metals (PGM), as well as other by-products such as sulfuric acid, slag, gypsum, and lead. (*)