Freeport, Mitsubishi to start joint project

JAKARTA (JP): PT Smelting Company, a joint venture between PT Freeport Indonesia and Japan's Mitsubishi Corporation, will start construction of a copper smeltery in Gresik, East Jakarta, next month.

Adri Machribie, the president of Freeport Indonesia, said yesterday that Vice President Try Sutrisno would lay the smeltery's foundation stone.

Speaking to journalists after a meeting with the Vice President, Machribie said PT Smelting Company would invest US$700 million into the plant, which would have an annual production capacity of 200,000 tons of cooper cathodes.

He said the plant is expected to start commercial production in early 1999.

Freeport holds a 25 percent stake in the smeltery. Mitsubishi holds the rest.

Mitsubishi will operate and manage the plant, and market its products. Freeport Indonesia, a subsidiary of the American McMoRan Copper and Gold Inc. will supply copper concentrates as raw materials.

Machribie said Indonesian copper concentrates from Freeport Indonesia are presently processed in Japan, Spain and the Philippines.

"With the establishment of the copper smeltery in Gresik, Indonesia will be able to process its own mineral resources," he said.

Shunichi Ajima, the president of PT Smelting Company, said the smeltery would enable Indonesia, which presently imports 60,000 tons of copper a year, to save on foreign exchange.

He said as many as 700 Indonesian smelters would be trained in Japan to run the plant, the first copper processing facility in the country.

Freeport McMoran currently holds 80 percent equity in Freeport Indonesia, which signed a work contract with the government in 1967. It began to mine copper and gold in the eastern province of Irian Jaya in 1973. The government and a private firm hold the remaining shares.

Freeport has a concession area of 2.6 million hectares after an extension of its contract in 1991.(hen)