Freeport plans copper smelter in East Java
Freeport plans copper smelter in East Java
JAKARTA (JP): After a suspension of over one year, Freeport
McMoRan Cooper & Gold Inc. from the United States and its new
partners have agreed to take over a copper smelting project in
Gresik, East Java.
Freeport reported recently that the company has reached a
final agreement with its new partners -- Mitsubishi Materials
Corporation of Japan and Fluor Daniel Inc. of the United States
-- to construct the copper project under a build, own and operate
plan.
The project, designed to have a production capacity of 200,000
metric tons of copper cathodes, will be owned by a new joint
venture which will be 70 percent owned by Mitsubishi, 20 percent
by Freeport and the remaining 10 percent by Fluor Daniel.
The project will be owned totally by foreign firms, without
any involvement of a domestic partner.
In a statement made available yesterday, Freeport said, "The
takeover has been approved by the Investment Coordinating Board."
The project, estimated to cost US$550 million, will be partly
financed by a combination of non-recourse loans and the venture's
own equity, Freeport said.
The project was earlier planned to be established by a
Freeport subsidiary, PT Freeport Indonesia Company, in
cooperation with Japan's Nippon Mining, Metallgesselschaft AG of
Germany and Indonesian private industrial companies, with a
planned investment of some $600 million.
But due to a financial fiasco in the German company, Freeport
Indonesia and Rio Tinto Minera of Spain, both subsidiaries of
Freeport, last year took over Metallgesselschaft to act as major
shareholders in the Gresik smelter project.
Manager
According to Freeport, Fluor Daniel will act as the overall
project manager responsible for engineering, procurement and
construction, using Mitsubishi's continuous copper smelting
processing system.
Mitsubishi, which will be in position to manage and operate
the smelter, will also be responsible for the marketing of copper
cathodes and other products of the copper plant, it said.
"PT Freeport Indonesia Company will provide 100 percent of the
smelter's copper concentrate feed stock requirement, estimated to
be approximately 600,000 metric tons annually," they said. The
copper concentrate for the Gresik project will be supplied by
Freeport Indonesia from its mine in Irian Jaya.
The construction of the plant is expected to begin by the
middle of this year and to be on stream in the second half of
1998.
The report also stated that the smelter project in Gresik
remains subject to the execution of definitive agreements among
the concerned parties, the confirmation of the feasibility of the
project, financing and certain Indonesian governmental approvals.
An earlier report said that Freeport Indonesia has planned to
increase its output capacity in Irian Jaya to 115,000 tons of ore
per day, from 70,000 tons at present, with a metal equivalent of
1.2 billion pounds of copper and 1.5 million ounces of gold.
In a related development, an Indonesia-New Zealand joint
venture, PT Copper Smelter Indonesia, has reportedly planned the
establishment of a similar copper smelter plant in Gresik with an
investment of $648 million.
The plant, which will be owned by Brierly Investment Ltd.,
Southpac Corporation Ltd., both of New Zealand, Universal
Securities of Monaco and a local company, PT Citra Pertiwi
Centra. The plant is designed to have an output capacity of
150,000 metric tons of refined copper and 420,000 tons of
sulfuric acid per annum. (fhp)