Gold and mining giant PT Freeport Indonesia (PTFI) will be able to complete its Manyar copper smelter construction in Gresik regency, East Java, by December 2023, according to Coordinating Minister for Economic Affairs Airlangga Hartarto. He said the smelter construction progress has reached 51.7%.
“I appreciated Freeport’s hard work in trying to achieve the targeted deadline of the construction of Manyar smelter, that has reached 51.7% based on the government’s approved S curve. This progress is an extraordinary achievement and can be an example for other companies, considering that 98% of the Manyar smelter project’s workers are Indonesians,” he said in a visit to the location on January 2, 2023. Besides Hartarto, Industry Minister Agus Gumiwang Kartasasmita and Deputy Trade Minister Jerry Sambuaga also visited the smelter project site.
President Joko “Jokowi” Widodo announced the ban on raw mineral exports on January 10, 2023. The government already banned the export of nickel, followed by bauxite and then copper which would be effective by June 2023. It plans to impose sanction if the company fails to comply with the requirement.
Manyar smelter development
Hartarto explained that Manyar smelter needed to pass the pre-commissioning and commissioning process before it could fully operate as other factories. The pre-commissioning and commissioning phase will make sure that the whole facility can function well without obstacles. The pre-commissioning and commissioning process will take around five months before it is fully operational in May 2024.
“We make sure that the construction of the smelter can meet the target of the S-curve timeline approved by the government. We continue to coordinate with stakeholders in accelerating the completion of the Manyar smelter,” Freeport Indonesia CEO Tony Wenas said.
Read also: Freeport unable to complete smelter construction by December 2023
Beside copper concentrate refining and processing facility, Manyar smelter will be equipped with supporting facility like Precious Metal Refinery. The refinery will process anode muds from copper concentrate’s refining process into gold and silver. The facility is projected to produce averagely 35 tons to 60 tons of gold per year.
“The supporting facility of Precious Metal Refinery can produce gold from upstream to downstream domestically and can give added value to Indonesia banking balance sheet,” Hartarto added.
Freeport has spent US$ 1.63 billion or Rp 25 trillion for the construction of Manyar’s smelter from total investment value of US$ 3 billion. Manyar’s smelter is designed with the biggest single line in the world and will process copper concentrates with a capacity of 1.7 million dry metric tons and produce copper cathode until 600,000 tons per year.
On January 31, 2023, Director General of Minerals and Coal of the Ministry of Energy and Mineral Resources, Ridwan Djamaludin, said the government received a letter from Freeport, saying the company’s smelter would not be completed in December 2023.
Two priority sectors
Indonesia has a serious homework in answering the big agenda of Jokowi’s National Strategic Projects (PSN). The agenda is the development of downstream industry and the industrialization of natural resources. The challenge is not separable from the need for huge investment in the mineral and coal sector which is part of 8 priority sectors in Indonesia’s investment need.
During the Mandiri Investment Forum on January 2, 2023, Minister of Investment Bahlil Lahadalia said that minerals and coal become the 2 main sectors in implementing Economic Transformation from the Premier Industry Sector to Added Value Based Industry or the development of downstream industry.
“The need for investment in this sector achieved US$ 431.8 billion until 2040,” he said.
