After get warning from the energy and mineral Resources (EMR) ministry, PT Freeport Indonesia (PTFI), agreed to build a new copper smelter with a capacity 1.7 million tons (MT), lower than the original plan - Photo by the Company

JAKARTA (TheInsiderStories) – After get warning from the energy and mineral Resources (EMR) ministry, PT Freeport Indonesia (PTFI), agreed to build a new copper smelter with a capacity 1.7 million tons (MT), lower than the original plan. Initially, the company promised to build new smelter with a capacity of 2 MT of copper concentrate per annum.

It said, the other capacity will be worked on by increasing the capacity of the existing smelter owned by PT Smelting, owned by the company and two Japanese firms, Mitsubishi Corporation Unimetal Ltd., and Nippo Mining Metals Co. Ltd. The projects build in the Java Integrated Industrial and Port Estate, Gresik, East Java,

The minister, Arifin Tasrif, emphasized the most important thing for the government is the mining license holder must build the new processing of copper concentrate in the country. While, president director PTFI, Tony Wenas, said the discussions with the government still continuing on the plans.

For the existing smelter, the expansion project has absorbed an investment US$300 million and its planned to operate in 2023. PTFI, Mitsubishi, and Nippon has signed a memorandum of understanding to increase the capacity at Smelting’ plant on on Nov. 13, 2020. The third parties will work together to increase the smelter capacity from 1 million tons to 1.3 million tons per year.

Last month, the American miner, Freeport-McMoRan Inc., (NYSE: FCX) announced to expand its existing copper smelter at Gresik. The company also wants to adding a precious metals refinery in place of constructing an entirely new smelter nearby.

The CEO, Richard Adkerson, said in a written statement, the company choose to expand the smelter and adding a precious metals refinery rather than building a new smelter. In addition, He stated, there would have to be an agreement allowing his company to export the excess.

PTFI expects its 2021 production to approximate 1.4 billion pounds of copper and 1.4 million ounces of gold, which is nearly double projected 2020 levels. The producer also aimed to generate an average annual production for the next several years of 1.55 billion pounds of copper and 1.6 million ounces of gold at an average unit net cash cost of approximately $0.20 per pound of copper.

The joint venture firm with state-owned mining holding, PT Indonesia Asahan Aluminium (MIND ID) estimated annual capital spending on underground mine development projects is expected to average approximately $900 million per year for the three-year period 2020 through 2022, net of scheduled contributions from the partner.

Adkerson also reported, the FCX’ consolidated copper sales from PTFI stood at 219 million pounds in third-quarter 2020 were higher than same quarter in 2019 of 139 million pounds, primarily reflecting higher copper ore grades and timing of shipments in third-quarter 2019, partly offset by anticipated lower mining and milling rates associated with the ramp-up of underground mining at the Indonesian unit.

The miner’ consolidated gold sales from PTFI of 230 thousand ounces in third-quarter 2020 were slightly lower than third-quarter 2019 consolidated gold sales of 239 thousand ounces, primarily reflecting lower mining and milling rates, partly offset by timing of shipments in third-quarter 2019. FCX’ consolidated sales volumes from PTFI are expected to approximate 790 million pounds of copper and 800,000 ounces of gold for the year 2020.

As the unit continues to ramp-up production from its underground ore bodies, metal production is expected to improve significantly in 2021, compared with 2020 and 2019. Until September, said Adkerson, Freeport-McMoRan posted a net loss attributable to common stock of $329 million, $0.22 per share and $(109) million, $(0.08) per share.

After adjusting for debt extinguishment costs and other net charges totaling $101 million, $0.07 per share, adjusted net income attributable to common stock totaled $430 million, $0.29 per share, in third quarter 2020. For background, FCX has a 48.76 percent ownership interest in PTFI and manages its mining operations.

Under the terms of the shareholders agreement, FCX’ economic interest in PTFI approximates 81 percent through 2022.

Written by Editorial Staff, Email: theinsiderstories@gmail.com