JAKARTA (TheInsiderStories) – The second-biggest copper miner in the world, PT Freeport Indonesia (PTFI), expects to start the construction of a new smelter, processing and refining plant in Java Integrated Industrial and Port Estate (JIIPE), Gresik, East Java in August, local media reported today (02/19).
The unit of United States’ Freeport-McMoran Inc. (NYSE: FCX) and PT Indonesia Asahan Aluminium (MIND ID), prepared a budget of US$600 million to construct the smelter. According to the CEO of PTFI, Tony Wenas, the source of funds to finance the project comes fron bank loans.
He added, total budget required by PTFI to build the smelters until 2023 is estimasing $3 billion. Based on the company plans, after spent the initial investment, in 2021, the miner will prepared another $1.1 billion to continue the smelter project.
The smelter is expected to consume 2 million tones (MT) of copper concentrate per annum and produce at least 500,000 MT of copper cathodes annually, said Wenas. The new plant will add to its existing smelting output of 300,000 MT of cathodes a year.
The construction of a smelter is part of Phoenix-based miner deal with Indonesian government to maintain its mining rights at Grasberg mines in West Papua until 2041. According to Richard C. Adkerson, President and CEO of Freeport Mcmoran on Jan. 23, in the fourth quarter (4Q) of 2019, PTFI has completed mining in the Grasberg open pit and continues to achieve important milestones in ramping-up production of large-scale quantities of copper and gold from its significant underground ore bodies.
In aggregate, the Grasberg open pit produced over 27 billion pounds of copper and 46 million ounces of gold in the 30-year period from 1990 through 2019. While in the Grasberg Block Cave, the miner has commenced extraction of ore from the underground mine, which is the same ore body historically mined from the surface in the Grasberg open pit.
Reserves from the Grasberg Block Cave totaled 17.2 billion pounds of copper and 14.2 million ounces of gold at Dec. 31, 2019, representing approximately half of PTFI’ total copper and gold reserves.
Ore extraction from the Grasberg Block Cave underground mine averaged 11,200 metric tons of ore per day in 4Q of 2019, including a planned three week outage for the installation of ore-flow infrastructure. Following completion of the maintenance program in mid-December, ore extraction from the Grasberg Block Cave averaged 17,000 metric tons of ore per day.
As existing draw points mature and additional drawpoints are added, cave development is expected to increase production rates to an average of 30,000 metric tons of ore per day in 2020, over 60,000 metric tons of ore per day in 2021 and 130,000 metric tons of ore per day in 2023 from five production blocks spanning 335,000 square meters.
While, deep mill level zone located east of the Grasberg ore body and below the Deep Ore Zone underground mine, has continued its ramp up of production. Hydraulic fracturing operations have been effective in managing rock stresses and pre-conditioning the cave following mining-induced seismic activity experienced in 2017 and 2018.
Ore extraction continues to exceed expectations, averaging 14,900 MT of ore per day in 4Q 2019 and reached approximately 16,000 MT of ore per day at year-end 2019.
Ongoing hydraulic fracturing operations combined with continued undercutting and draw bell openings in the two currently active production blocks are expected to expand the cave, supporting higher production rates that are expected to average 29,000 MT of ore per day in 2020, approach 60,000 MT of ore per day in 2021 and 80,000 MT of ore per day in 2022 from three production blocks.
In this year, Freeport-Mcmoran prepared the capital expenditures are expected to approximate $2.8 billion, including $1.8 billion for major projects primarily associated with underground development activities in the Grasberg and completion of the Lone Star copper leach project in Arizona.
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.
by Linda Silaen, Email: email@example.com