09 November 2022
PT Freeport Indonesia (PTFI) disclosed it can still export copper concentrate until its copper cathode smelter, its second smelter, is completed in December 2024. However, under Article 170A of the Minerals and Coal Law, UU Minerba Number 3 of 2020, all mineral concentrate exports are to cease at the latest by 3 years from the time the Law comes into force. UU Minerba came into force on 10 June 2020. This means the ban on export of mineral concentrates takes effect in June 2023.
Freeport Indonesia Vice President of Corporate Communications Riza Pratama says under the IUPK special mining operation permit agreed between the Indonesian government and PTFI in 2018, Freeport Indonesia is allowed to continue sales of concentrate until its new smelter begin operating. Riza revealed as of the end of September 2022, the PTFI smelter development project had achieved almost 42% progress with more than US$ 1.4 billion spent.
According to the smelter construction project S-curve that was agreed and that is currently used as reference by PTFI and the government, smelter construction is targeted for completion by the end of December 2023, to be followed by the pre-commissioning and commissioning stages, such that the new smelter start-up will only take place in May 2024. Subsequently operation will ramp up with full commercial operation achieved by December 2024. “As smelter development proceeds, PTFI will still need to continue selling its concentrate overseas until the new smelter begins operating,” he informed Kontan.co.id, on Wednesday (9/11).
Riza said allowing export of mineral concentrate is crucial in order to allow PTFI’s mining operation to continue running normally and ensure funding of smelter development to completion. On the other hand, contribution to the state as expected by the government and shareholders, in particular majority shareholder Indonesia/Mind ID, as well as stakeholders can be maintained. "The PTFI smelter development project S curve mentioned above takes into account the impact from the Covid 19 pandemic since early 2020 to the present time. The S curve is also still in fulfillment of the mandate on smelter development completion time under PTFI’s IUPK,” he asserted.
Meanwhile, Riza said, UU Minerba No 3 of 2020 had not taken into account impacts from the Covid-19 pandemic. Riza says at a time when the state is in need of revenue to recover from the Covid-19 pandemic and ensure employment stability in mining industries/ operations, the government and the Company need to sit down together to guarantee continuity of mining operations.
He said this could be established through issuance of relevant regulation. Mining operators in the process of completing smelter development should be afforded enough time to proceed to full commercial operation. “Bearing in mind PTFI’s significant contribution to Mind ID finances, and Mind ID’s need to pay the debt it incurred in loans to acquire PTFI shares, it is in the interest of Indonesia and Mind ID to safeguard continuity of PTFI’s sustainable mining operation,” he said.
For the record, at this time only around 40% of the copper concentrate produced by PTFI can be absorbed domestically. Riza disclosed, in 2022 PTFI’s copper concentrate production amounted to around 3.1 million tons, with approximately 1 million tons prioritized for meeting demand from PT Smelting Gresik. The remaining 2.1 million tons was exported.
Kami menghimbau para pencari kerja untuk berhati-hati dan mewaspadai beragam modus penipuan perekrutan yang mengatasnamakan PT Freeport Indonesia. Dalam setiap proses rekrutmen dan penerimaan karyawan, PT Freeport Indonesia maupun konsultan rekruitmennya tidak memungut biaya apapun.
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