Freeport to lead building
of Gresik smelter plant
JAKARTA (JP): PT Freeport Indonesia and Rio Tinto Minera of Spain, both subsidiaries of the American mining company Freeport- McMoRan Copper & Gold Inc (FCX), will replace Metallgesselschaft AG (MG) of Germany as the major shareholders in the copper smelter in Gresik, East Java.
The chief commissioner of Freeport Indonesia (FI), James R. Moffet, told newsmen here yesterday that the replacement of Metallgesselschaft AG was due to a decline in their financial condition.
MG is currently the 14th largest European company.
Previously, MG had led a consortium to build Gresik copper smelter plant, which would be 55 percent owned by MG, 20 percent by Freeport Indonesia, 20 percent by Nipon Mining and five percent by private Indonesian industrial companies.
Moffet declined to elaborate the new composition of the smelter project's shareholders as the matter of the company's new partner remains under discussion.
However, he said that Nipon Mining and Metal had indicated their interest to go forward even without the presence of MG.
The smelter plant will be built on a 200-hectare plot near the industrial complex of PT Petro Kimia Gresik (PKG).
According to Moffet, by-products of the first Indonesian smelter plant, such as sulfuric acid, will bring advantages both for Indonesia and FI itself.
He said that when the construction of the smelter plant was complete, Indonesia would no longer need to import sulfuric acid to fulfill PKG's demand for producing phosphate fertilizer as the plant would provide enough sulfuric acid for this purpose.
Production
Hoediatmo Hoed, the president of Freeport Indonesia, said the smelting plant is expected to produce around 150,000 to 200,000 metric tons of copper a year, of which approximately 60,000 will be sold on domestic market, while the remainder will be exported.
The plant is expected to employ 700 people,
Hoediatmo said that FI will provide 50 percent annually of the ore required by the Gresik smelter.
According to FI, FCX has scheduled an increase of FI's annual copper ore production from 658 million pounds in 1993 to 1.1 billion pounds in 1996 and 787,000 ounces of gold in 1993 to 1.5 million ounces in 1996.
The production increase is also aimed at meeting 50 percent of the demand of Rio Tinto Minera (RTM), FCX's other copper smelting plant in Huelva, Spain, and the planned Gresik smelting plant.
At the press conference, Moffet declined to say when the construction of the plant would be completed because the company is still reviewing the engineering study which has been completed by Lurgi AG, MG's wholly owned subsidiary. Construction has been delayed since 1992.
However, he pledged the consortium will move quickly because FI needs the smelter to process its ore.
FI said the smelter could be operational by 1998.
Richard H. Block, FCX's senior vice president, and Javier Targheta, RTM's managing director, will direct the development of the Gresik smelting plant. (03)