Indonesia Could Reap Rp120 Trillion Windfall from Giant Mine by 2030

PT Freeport Indonesia (PTFI) projects its contribution to the state will surge to more than US$7 billion, or approximately Rp120 trillion, per year by 2030. This estimate is supported by the normalisation of production capacity, both upstream at the mine and at its processing facilities. PTFI President Director Tony Wenas explained that state revenues would increase year on year. ‘Once we reach full production capacity, we see that state revenues could exceed US$7 billion per year. So, if we convert that to rupiah, it is around Rp120 trillion per year, and so on in the years ahead,’ he stated during a hearing with Commission XII of the Indonesian House of Representatives in Jakarta, as quoted on Wednesday. The projected increase in contributions is calculated based on assumed mineral prices of US$6 per pound for copper and US$4,500 per ounce for gold. In 2026, the company’s contribution to the state is estimated at US$2.6 billion, equivalent to Rp47.05 trillion. This figure is predicted to rise to US$4.7 billion, or Rp85.09 trillion, in 2027, in line with the ramp-up of production capacity. ‘Looking at the projections for 2027, in accordance with our production increase, state revenues could reach US$4.7 billion, which includes US$800 million in non-tax state revenue including royalties, then taxes including corporate income tax of US$1.9 billion, and also dividends of US$1.9 billion for the government through MIND ID,’ Tony detailed. The company’s production capacity recovery plan targets reaching 100% by the end of 2027, following a ramp-up phase of 65% this year and 75% in the first half of 2027. Concurrently, the company is developing a new mine, the Kucing Liar block, which is scheduled to begin production in 2029. ‘In 2027, we can reach 1.2 billion pounds of copper and one million ounces of gold, or about 31 tonnes. In 2028, there will be an increase to 1.6 billion pounds of copper and 1.4 million ounces of gold, or 43 tonnes, and so on until 2030,’ he explained. Furthermore, the company is targeting the Manyar smelter in Gresik to resume operations starting in September this year. Copper cathode production from the smelter is projected to reach 600,000 tonnes per year. ‘State revenues, consisting of taxes, dividends, and royalties, have indeed decreased to US$2.6 billion from US$4.3 billion last year. But we see the projection for 2027 reaching US$4.7 billion,’ he concluded.