Economic Potential of Freeport Smelter in Gresik

14 July 2023

The Indonesian government continues to commit to downstream the mining sector despite the continuous opposition from developed countries. Downsizing and banning the export of raw minerals is an effort to create added value and accelerate economic growth.

Supporting the government's move to boost mining downstream, the Indonesian Mining Industry Holding (MIND ID), especially through PT Freeport Indonesia (PTFI), continues to accelerate the construction of the world's largest single-line design copper smelter factory located in the JIIPE area, Gresik, East Java.

One of the downstream forms of the factory is the production of copper, which is the main component in the electric vehicle (EV) ecosystem. Some of the products needed in EVs are nickel, aluminum, cobalt, and lithium.

Construction Manager of PT Freeport Indonesia Smelter, Yoga Amaliasari, said until last June, the smelter factory construction had reached 74.27% and absorbed 17 thousand workers from the surrounding area.

PTFI will continue to ensure the continuity of the PTFI Smelter and will complete the smelter construction by the end of 2023, followed by the pre-commissioning stage. PTFI's smelter is expected to start operating at the end of May 2024. Yoga said when met by the 2023 SOEs Exploration Team in Gresik last Friday (7/7/2023).

In his handover to the PTFI smelter project, the President of Indonesia, Joko Widodo, conveyed the importance of the PTFI smelter's role in pushing Indonesia to become a developed country. In the future, we have competitiveness. The smelter is about to support Indonesia becoming a developed country because previously, the country relied on consumption and now will rely on production, said Indonesian President Joko Widodo on Tuesday (20/6).

Furthermore, Yoga said there were advantages to this smelter construction in the Gresik area, in addition to more integrated transportation and logistics infrastructure facilities, many by-product off-takers from the results of copper refining at the smelter came from that area.

For information, the PTFI smelter is said to be able to produce various by-products apart from the main product of 600,000 tons of copper cathode (copper) per year when it operates at full capacity in 2024.

The by-products will be capable of producing pure gold, silver bullion, and platinum group metals (PGM). This by-product results from processing 6,000 tons of anode sludge from copper cathode processing residue. Yoga claims this is the first in Indonesia because only mud anodes were initially exported to Japan.

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