Wednesday, May 29, 2024

Indonesia will loss IDR 57 trillion revenue if government bans export of copper, Freeport says

Reading Time: 2 minutes
Gusty da Costa

Journalist

Mahinda Arkyasa

Editor

Interview

Vice President Corporate Communication of PT Freeport Indonesia Katri Krisnati, said that Indonesia will lose IDR 57 trillion in the form of tax, dividends and non tax revenue this year if the government suspend the operation of PT Freeport Indonesia. In addition to the losses, several regions in Papaua will lose IDR 8.5 trillion in revenue in the form of provincial government budget.

Krisnati added that the company continues to have dialog with the government and all stakeholders to review the impacts of the copper export ban. “We hope that the government consider derivative regulation covering the details of minerals that can be sold and cannot be sold abroad,” Krisnati stated in a statement on April 12, 2023.

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 implemented on June 2023. The government plans to impose sanctions if the company fails to comply with the requirement.

Meanwhile, Freeport Indonesia is developing a smelter that can turn copper concentrate into cathodes with an annual capacity of 1.7 million tons.

The smelter construction will cost about US$3 billion. The funds for the smelter would come from a loan and the company’s equity.

In general, Krisnati said that copper export ban can cause the suspension of all operational activities of PT Freeport Indonesia . The suspension can significantly impacted all operation and sales of mining commodities.

Bans ores not concentrate

Deputy Executive Director of Indonesia Mining Association Djoko Widajatno, said that mineral and coal law only bans the export of copper ores and not copper concentrates.

Copper concentrate is a result of a further processes and therefore export of copper concentrates should be allowed. “However, based on obligation in Freeport’s Special Mining Permit , the company needs to process the copper ores in a domestic smelter. The first smelter is currently operational in Gersik, while the new one is being developed in Manyar, Gersik,” Widajanto said.

Energy and Mineral Resource Minister Arifin Tasrif, said that the government is still evaluating all options before deciding to ban copper export. According to Widajanto, the government is still considering whether to ban or to allow the export of copper concentrates.

One of the government’s consideration is the progress of the copper smelters construction. Following a field inspection to Freeport’s smelter construction in Manyar, Gersik on March 28, Widajanto said that the progress of the smelter has achieved 57.6%.

Widajatno said Freeport has promised to complete the construction of the smelter by 2024. Because the company has spent half of the total investment value.

Gusty da Costa

Journalist

Mahinda Arkyasa

Editor

 

Interview

SUBSCRIBE NOW
We will provide you with an invoice for your reimbursable expenses.

Free

New to Indonesian market? Read our free articles before subscribing to the premium plan. If you already run your business in Indonesia, make sure to subscribe to the premium subscription so you won’t miss any intelligence & business opportunities.

Premium

$550 USD/Year

or

$45 USD/Month

Cancelation: you can cancel your subscription at any time, by sending us an email inquiry@ibp-media.com

Add keywords to your market watch and receive notification:
Schedule a free consultation with us:

We’ll contact you for confirmation.

FURTHER READING

Several names has been considered by the Indonesian Democratic Party of Struggle (PDI-P) as a potential candidate for the North Sumatra and Jakarta Governor election.
The Indonesian Ministry of Communication and Informatics, representing the Indonesian government, met with Chinese representatives to discuss collaboration on investment in artificial intelligence (AI) technology development.
State electricity company PT PLN, through its subholding PLN Nusantara Power (PLN NP), signed a Joint Development Study Agreement (JDSA) with the United Arab Emirates (UAE) energy company Masdar, to increase the capacity of the Cirata Floating Solar Power Plant (PLTS).
The Indonesian Employers Association (Apindo) opposes the implementation of the Tapera public housing savings program, which requires a 3 percent contribution from workers’ wages, with 0.5 percent to be paid by employers.
PT Barito Renewables Energy (BREN) has been included in the FTSE Global Equity Index, a large cap category, which will take effect on Monday, June 24, 2024
The Corruption Eradication Commission (KPK) has named a number of suspects in its investigation into the alleged corruption within the Directorate General of Railways (DJKA), the Ministry of Transportation.