Freeport Indonesia Promises to Build Copper Smelter in mid-2020 - Photo by PT Freeport Indonesia

JAKARTA (TheInsiderStories) – Gold and copper miner, PT Freeport Indonesia (PTFI) is predicted to generate a profit of US$2 billion in 2022, said senior official yesterday (01/09). As we know, the acquisition process of the PTFI’ majority shares to PT Indonesia Asahan Aluminum (Inalum) was completed on Dec. 21.

The Inalum’ CEO Budi Gunadi Sadikin said the reason that PTFI could be profitable because the gold reserves are still quite large and Grasberg Open Pit it will soon run out in this year. Moreover, he added, there are other copper and gold mines in the PTFI area such as the mining area with the name Cat Liar and Block B which until now have not been excavated.

On the environment issues, Indonesia’s Ministry of Living Environment and Forestry has asked PTFI to complete ecosystem and tailing management studies this year. According to Inspector General at the ministry, Ilyas Assad, the studies has been started this month, and expected to finished before end of 2019.
Assad added, PTFI’ tailing waste has a huge potency for Papua development. For an example, it can be used  for brick-making. Even a company—which he ignored to named—has eyed Freeport’s tailing waste and planned to absorb 20,000 tons of tailing waste daily.
As the miner’ concentrate export license to end, Energy and Mineral Resources ministry vowed to extend PTFI’ license. But Director General of Mineral and Coal at the EMR ministry, Bambang Gatot Ariyono also asked the company to soon decide the smelter development location.
The Government expected the smelter location would be in Gresik in East Java. PTFI has an obligation to build a copper smelter with a capacity of 2 to 2.6 million tons per year and it is expected to be completed in less than 5 years.

Since 2014, President Joko Widodo has declared his intention to acquire majority shares in PTFI during his presidential election campaign. The change in share ownership will officially occur after a payment transaction of $3.85 billion to FCX in January 2019.

Inalum has secured $3.8 billion short-term loan facility from a syndicate banks led by Bank of Tokyo Mitshubisi to pay 51 percent of PTFI  divestment shares. Then to pay this debt, the miner issued global bond with same amount anf use it to pay PTFI’ shares.

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

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