Freeport to fund new copper project

Freeport to fund new copper project

SCOTTSDALE, Ariz (Reuter): Freeport McMoRan Copper and Gold said it is close to concluding a finance package to fund a new 200,000 ton copper smelter and refinery in Gresik, East Java.

Freeport's vice-president of finance, Robert Wohleber, said the company is in the detailed process of arranging and completing finance for the new $650 million smelter. "I would say we would hope to have this completed mid-part of this year," Wohleber said. He would not indicate the financial institutions involved in the talks, but the final package would have some Japanese financing.

Freeport McMoRan has a majority stake in PT Freeport Indonesia, the subsidiary which will have a 20 percent stake in the new Gresik smelter and refinery. Fluor Daniel Asia has a 10 percent stake, with Mitsubishi Materials 70 percent.

"We project mid-1996 for construction to begin, and completion we are seeing in 1998, in the second half," Wohleber said.

Gresik will be financed by a mixture of borrowings from the lender group, and equity contributions from the three shareholders.

At the present time Freeport operates a large copper mine in Indonesia but has no smelting and refining capacity there, recently expanded output at its RTM smelter in Spain.

Robert Zwerneman, Freeport's director of market research and analysis, said here during the American Copper College meeting that global copper demand was expected to rise 3.5 percent this year with a supply surplus of 175,000 tons.