Observer Refers to Freeport Smelter as Long term Economically Beneficial Project

13 May 2022

Executive Director of the ReforMiner Institute, Komaidi Notonegoro, referred to PT Freeport Indonesia’s issuance of bonds or senior notes in US$ currency to the amount of US$ 3 billion or the equivalence of IDR 45 trillion a common decision.

Especially so if the resulting funds from the bonds sale were intended to build a smelter. “I think the smelter would not only be positive for PTFI but also for the national economy on a broader scale,” Komaidi said in a statement on Thursday (5/2). He also mentioned that taking out loans or debts is a common financing mechanism. In his perception PTFI had already made its own calculations in its decision to borrow. “It could also decide not to borrow and instead sell part of its shares. For them it was just a matter of choosing which way to go.

Nevertheless Kamari believes if the funds obtained will be used properly and in accordance with ts plan to finance a smelter many positive aspects could result from it, such as creation of jobs, making new investments, having more controlled production of gold and minerals and of course creating more orderliness in various aspects.” Komaidi explained.

PT Freeport Indonesia which is a member of the BUMN Mining Holding Company also known as Mining Industry Indonesia (MIND ID) announced its decision to take out a loan of US$ 3 billion, equivalent to IDR 45 trillion or 4.763% of US$ 750.0 reaching maturity on April 14 2027, 5.315% of US$ 1,500.0 maturing Aprll 14 2032, and 6.200% of US$ 750.0 maturing April 4 2052.

For information, construction of the copper smelter of PT Freeport Indonesia (PTFI) began in the JIIPE Integrated Industrial Estate, Gresik, in East Java, in October 2021 with an investment of IDR. 45 trillion. President Director of PT Freeport Indonesia, Tony Wenas, said that it will take five years for the smelter to be completed and be operational at the earliest in 2024. The project will be the largest single line smelter in the world which usually takes longer to build than those on a smaller scale.

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