JAKARTA (TheInsiderStories) – The energy and mineral resources (EMR) ministry gave a warning to the gold and copper miner, PT Freeport Indonesia (PTFI), for the delay in building a smelter in Gresik, East Java. Until now, said the minister, Arifin Tasrif, the copper smelter construction has only reached 5.86 percent.
He said, the unit of state-owned firm, PT Indonesia Asahan Aluminium (MIND ID) and Arizona-based Freeport Mcmoran Inc. (NYSE: FCX), the miner has replied the warning letter on Nov. 11 and has order the Japanese constructor, Chiyoda Corp., to carry out the pilling test work.
Last August, PTFI‘ president director, Tony Wenas, said the project was affected by the COVID-19 pandemic, caused the large-scale social restrictions implemented in Gresik, including in the Java Integrated Industrial and Port Estate (JIIPE) areas, where the smelter will be built.
As is known, the construction of the new smelter is part of the miner commitment when the mining operation was extended to a Special Mining Business License from previously using the Contract of Work scheme.
The CEO of Freeport-McMoRan, Richard Adkerson, said in an official statement on Oct. 23, his 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.
At the same time, he announced, the ramp-up of at the Grasberg mines managed by PTFI in Papua continues to advance on schedule. Combined average production from the Grasberg Block Cave and DMLZ mines approximated 60,000 metric tons of ore per day during third-quarter 2020, 9 percent above the second-quarter 2020 average but approximately 15 percent below the July 2020 forecast, primarily reflecting unplanned downtime and a brief labor-related work stoppage.
At the end of September 2020, combined average production from the both mines totaled approximately 94,000 metric tons of ore per day and the ramp-up schedule remains on track. 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 joint venture firm with state-owned mining holding, MIND ID, estimated the annual capital spending on underground mine development projects is expected to average approximately $900 million per year for during 2020 to 2022.
Under the terms of the shareholders agreement, Freeport-Mcmoran’ economic interest in PTFI approximates 81 percent through 2022.
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