PT Freeport Indonesia (PTFI) is accelerating the process of repairing smelter facilities by installing replacement equipment at the Java Integrated Industrial and Ports Estate (JIIPE), Gresik, East Java.
Based on the repair plan for the smelter that burned down in October 2024, the operational ramp-up is estimated to begin at the end of the first semester of 2025.
After the fire, PTFI filed for an extension or relaxation of copper concentrate exports. Because the company’s mining products from Papua cannot be processed in the smelter.
“We use air cargo transportation as a faster shipping alternative compared to sea transportation,” said Katri Krisnati, VP Corporate Communications PTFI, as reported by Katadata.co.id, on Wednesday, February 13, 2025.
However, PTFI is currently still discussing with the government regarding the extension of the relaxation.
“We believe the government will accommodate the plan in connection with the force majeure that occurred at the PTFI smelter in October 2024,” she said.
Freeport McMoran (FCX), the parent company of PTFI, reported that it will export copper concentrate in the first quarter of 2025. This is because the smelter, which was built with an investment of around US$3 billion (Rp49 trillion), is still under repair.
FCX also stated its readiness to pay export duties of 7.5 percent for copper concentrate exports during 2025. In its 2024 report, PTFI estimated the cost of restoration, repair and replacement for the smelter at around US$100 million (Rp1.63 trillion). This cost is expected to be largely offset by the restoration through the construction insurance program.
Conditions for approval of PTFI export relaxation
Bahlil Lahadalia, Minister of Energy and Mineral Resources (ESDM) said the government could approve the extension of the copper concentrate export relaxation in 2025 proposed by PTFI. However, there are conditions that must be met by the company.
“I can give permission (extension) but they must hasten when the repair (of the smelter) will be completed. So that we are fair,” said Bahlil on Tuesday, February 11, 2025.
Meanwhile, the government wants to accelerate the smelter repair time if the repair limit or target has been set, the relaxation discussion can be processed by the government.
“We can report it in a limited meeting with the Coordinating Minister, Technical Ministers, and report to the President,” he said.
Meanwhile, the Ministry of Trade (Kemendag) supports the plan to extend the relaxation of copper concentrate exports for PTFI until December 2025.
Dyah Roro Esti, Deputy Minister of Trade, stated that the support was given by considering various aspects, starting from cost and benefit analysis, its impact on the upstream system, as well as social and economic effects.
“However, we still pay attention to the sustainability of government policies related to the downstreaming of natural resources,” said Dyah, on Monday, February 10, 2025.
