Freeport copper smelter project still on track<\/p>\n
JAKARTA (JP): Copper and gold producer PT Freeport Indonesia
\nhas said development of a US$626 million copper smelter plant in
\nGresik, East Java, which it partly owns, is running on schedule
\ndespite political and economic turmoil.<\/p>\n
Freeport's executive vice president and chief financial
\nofficer Stephen Jones said Friday trial production at the plant
\nwould begin next month, with commercial production scheduled in
\nDecember.<\/p>\n
\"The plant is 95 percent complete. They are going to heat up
\nthe furnace in August,\" he said at a media conference.<\/p>\n
The country's first copper smelter plant belongs to a joint
\nventure, PT Smelting Co, which is 60.5 percent owned by Japan's
\nMitsubishi Materials Corporation, 25 percent by Freeport, 9.5
\npercent by Japan's Mitsubishi Corporation and 5 percent by Nippon
\nMining and Metals Co. Ltd, also of Japan.<\/p>\n
Construction started in 1996.<\/p>\n
The plant will need 656,000 tons of copper concentrate, 98,000
\ntons of silica sand, 52,000 tons of limestone and 23,000 tons of
\ncoal per year. All the copper concentrate will be sourced from
\nFreeport's copper mine in Grasberg, Irian Jaya.<\/p>\n
Jones said the plant would produce 200,000 tons of copper
\ncathode per year, 60,000 tons of which would be absorbed on the
\nlocal market and the remainder sold on the export market.<\/p>\n
\"The plant will turn Indonesia into a net-copper exporter from
\na net-copper importer at present.\"<\/p>\n
Jones added that the smeltering process would extract gold
\nelements blended in copper concentrate, with the extracts to be
\nsent to an overseas refinery plant for further processing into
\ncommercial gold.<\/p>\n
Smelting Co. reportedly chose Gresik as the plant's location
\nbecause state petrochemical company PT Petrokimia, also located
\nin Gresik, will purchase a by-product, sulfuric acid, to make
\nfertilizer. The plant will produce 592,000 tons of sulfuric acid
\nper year.<\/p>\n
Jones also said that Freeport expected to produce 240,000 tons
\nof ore a day by the end of the year at its Grasberg mine, up from
\naround 200,000 tons a day currently.<\/p>\n
The company received approval in December last year to
\nincrease daily output to 300,000 tons from the then average of
\n127,000 tons, but it lacks facilities at present to reach that
\nlevel.<\/p>\n
\"We have environmental approval for 300,000 tons but not the
\nfacilities to produce it.\"<\/p>\n
Copper production for the year will be in the region of 1.7
\nbillion pounds, while the mine will produce about 2.7 million
\nounces of gold, Jones said.<\/p>\n
Freeport is 81.28 percent owned by New Orleans-based Freeport
\nMcMoRan Copper and Gold, 9.36 percent by the Indonesian
\ngovernment and 9.36 percent by PT Indocopper Investama
\nCorporation.<\/p>\n
Indocopper is 49 percent owned by Freeport McMoRan, 50.48
\npercent by PT Nusamba Mineral Industri, and 0.52 percent by the
\npublic. Nusamba Mineral is controlled by Mohammad \"Bob\" Hasan, a
\nlongtime crony of former president Soeharto and Soeharto-led
\nfoundations.<\/p>\n
Jones added that Freeport was naturally benefiting from the
\nrupiah's slide against the U.S. dollar since its earnings were
\nmainly in dollars and its costs in rupiah.<\/p>\n
He noted, however, that the depressed prices of its core
\ncommodity sellers -- gold ore and copper -- were hurting
\nearnings.<\/p>\n
\"The value of our primary commodities has shrunk
\nsignificantly. While Indonesia undergoes economic difficulties,
\nour business is doing the same,\" he said. (jsk)<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/freeport-copper-smelter-project-still-on-track-1447893297",
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