PT Freeport Indonesia is striving to secure an extension for its copper concentrate export permit following the temporary shutdown of its Manyar smelter in Gresik, East Java after a fire that broke out on Monday afternoon, October 14, 2024.
The fire hit the gas cleaning plant, an essential facility for separating clean gas. According to Freeport McMoran’s third-quarter report, the incident caused significant damage to the production infrastructure for sulfuric acid, which is crucial in the copper smelting process.
“The incident has resulted in damage to the sulfuric acid production infrastructure required for copper smelting,” the report said as quoted on Thursday, October 24, 2024.
Operations at the smelter have been suspended while repairs are underway, and an investigation into the cause of the fire is ongoing.
In the meantime, PT Freeport Indonesia (PTFI) is working closely with the Indonesian government to obtain permission for copper concentrate exports while the smelter remains offline. The company is also looking into having the repair costs covered by insurance.
The fire has not impacted mining operations at Freeport Indonesia’s site in Papua. The company had already secured an export permit extension for copper concentrate until December 31, 2024 under Trade Ministerial Regulation No. 10/2024, a revision of the previous Trade Regulation No. 22/2023.
This regulation was issued to allow mining companies to complete their smelter projects. Besides PTFI, four other companies − PT Amman Mineral (copper concentrate), PT Sebuku Iron Lateritic Ores (iron refining), PT Kapuas Prima Citra (lead), and PT Kobar Lamandau Mineral (zinc) − have been granted export extensions until May 2024.
The export ban, originally scheduled to take effect on June 10, 2023, was relaxed by the government to give these companies additional time to finish their smelter constructions. The policy was further extended to the end of December 2024.
According to Budi Santoso, Director General of Foreign Trade at the Ministry of Trade, the relaxation of export rules was vital to ensure business certainty within the country.
This export relaxation stems from the 2020 Mineral and Coal Mining Law (UU Minerba), which mandates that mining companies must build smelters for mineral processing.
“Relaxing the export policy is crucial to ensure business continuity in the country,” Budi Santoso said on June 4, 2024.
