Copper smelter to begin exporting next year

Copper smelter to begin exporting next year

SYDNEY (Dow Jones): Indonesia's pioneer copper smelter, PT Smelting Copper Co., has obtained commitments to ship 30,000 metric tons of copper cathodes to buyers in Asia, an official with Mitsubishi Corp. in Tokyo told Dow Jones Newswires.

Mitsubishi Corp., which is responsible for PT Smelting Copper's copper marketing, has a 9.5 percent stake in the company, while Mitsubishi Materials Corp., also in Tokyo, has a 60.5 percent stake. PT Freeport Indonesia has a 25 percent stake in the smelter and the balance is owned by Nippon Mining & Metals Corp.

"We've obtained commitments on shipments for the first quarter (of 1999)," the official said. "It will be a trial lot."

PT Smelting Copper began operations in October this year amid political and economic uncertainties in Indonesia.

The official said shipments will be in tranches of 10,000 tons a month. He declined to reveal the destination of the shipments, adding that premiums were also under negotiations.

The company had offered at US$43 a ton premium above the London Metal Exchange cash copper, on a cost-insurance-freight basis to customers in Taiwan and South Korea.

PT Smelting Copper, located in Gresik, East Java, has an annual installed capacity of 200,000 tons refined copper.

Production was initially meant to meet Indonesia's domestic copper needs. But the Asian economic crisis, which has destroyed Indonesia's manufacturing base, forced the smelter to seek export markets elsewhere in Asia.

The official said production next year will reach 150,000 tons.