The Ministry of Investment has announced the government’s approval of PT Freeport Indonesia’s (PTFI) plan to build a smelter in Papua as part of the negotiations for extending PTFI’s contract until 2061.
“To ensure that the people of Papua also benefit from the copper and concentrate sourced from their land, it is crucial to have a smelter in Papua,” Minister of Investment Bahlil Lahadalia said during the inauguration of the Manyar Smelter in Gresik, East Java, on Thursday, June 27, 2024.
In addition to the smelter construction in Papua, the government will also receive an additional 10 percent share of PTFI, increasing Indonesia’s ownership to 61 percent.
“It would be unfair not to extend the permit, especially since they are building a smelter in Gresik, and we will also receive an additional 10 percent share. Freeport has agreed to build a smelter in Papua as well,” Bahlil said.
He emphasized that with this level of ownership, PTFI is now effectively an Indonesian entity.
“It is no longer owned by Freeport McMoran; it is now owned by the state-owned enterprise (BUMN). Therefore, there is no need to complicate the extension process,” the minister said.
However, the extension of the Special Mining Business Permit (IUPK) for PTFI has not yet been finalized. Bahlil assured that the government is working to complete the process promptly.
“Once PTFI meets all the requirements, we will expedite the process,” he said.
Bahlil also expressed his gratitude for the operationalization of the Manyar Copper Smelter owned by PTFI in Gresik, acknowledging the long and dynamic journey to its completion.
“I understand that building this smelter was not easy. There were discussions about relocating it to North Maluku, and Papua had also requested it since the copper originates from there, but the smelter is being built in East Java,” he said.
This approval signifies a significant step in ensuring that the economic benefits of Papua’s natural resources contribute directly to the local community while enhancing Indonesia’s stake in PTFI.
