Freeport to boost copper supply to its Spanish sister firm
JAKARTA (JP): PT Freeport Indonesia (FI), the Indonesian copper and gold mining subsidiary of Freeport-McMoRan Copper and Gold Inc. (FCX) of the United States will provide its Spanish sister company, Rio Tinto Minera S.A. (RTM), with approximately one half of its copper concentrate requirements in 1996.
FCX said in a statement made available yesterday that the copper concentrate to be supplied to the RTM smelter will account for around 30 percent of FI's expected production.
FI is providing the RTM smelter with approximately 150,000 tons of concentrate in 1994.
RTM, also a FCX subsidiary, has recently accepted a project financing offer from Barclays Bank Plc for US$270 million primarily related to the $215 million expansion program of its copper smelter and refinery complex, located near Huelva, Spain.
This project financing, which is non-recourse to FCX, will also provide funds for refinancing RTM's gold loans and working capital loans.
The expansion design and construction are being managed by Lurgi AG, a German engineering firm, on a fixed-price turnkey basis.
Plan
FI earlier announced a plan to construct a copper smelter in Gresik, East Java, as part of the prerequisites set by the Indonesian government for the extension and expansion of its mining contract in Irian Jaya.
Jens-Peter Schaefer, the president of Lurgi AG, told newsmen during his visit to Indonesia earlier this year that the final decision on the $600 million project will be made in the second quarter of this year. The planned smelter will be designed to produce 150,000 tons of copper metal annually.
Lurgi will own a 55 percent stake in the project, which will be the first copper smelter in the country. FI will have another 20 percent and Nippon Mining Company Ltd. of Japan will hold the remaining 25 percent.
Construction of the copper smelter was originally planned to start in March last year but it was then postponed last August. The start of the construction was delayed again due to the German shareholder's financial difficulties.
Freeport, therefore, announced recently that it will take over the leadership of the copper smelting project in Gresik.
Meanwhile, an Indonesia-New Zealand joint venture, PT Copper Smelter, announced early last month that it would also set up a copper smelter in Gresik, with an investment of around $648 million. The company will also produce around 150,000 tons of copper metal annually. (hen)