Raw minerals export opened, companies still pushing for smelter construction

Export of raw minerals is opened, the company is still pushing for smelter construction


Affected by the Covid-19 pandemic, PT Freeport Indonesia (PTFI) said thesmelterconstructionhad not progressed as expected.Even so, management emphasized that PTFI is committed to continuing to provide added value to Indonesia in various ways.

Vice President (VP) for Corporate Communications ofFreeport Indonesia, Riza Pratama, revealed that the actual realization of physical progress for the construction of asmelterdid not reach the target set due to the impact of the Covid-19 pandemic.”The government and PTFI are currently discussing anddetailing whichsmelterconstruction activitieshave been affected by the Covid-19 pandemic,” Riza told Kontan, Wednesday (28/4).

In accordance with the obligations in the IUPK, Freeport Indonesia needs to complete the construction of anewsmelterby December 2023. So far PTFI is still committed to implementing thesecondsmelterprojectin Manyar, Gresik, which is also part of the divestment.

On the other hand, the government’s move to loosen raw mineral exports has been welcomed positively by PTFI.Furthermore, PTFI will continue to discuss cooperatively with the Government to realize PTFI’s production plan and contribution.”We welcome that the Indonesian government has issued PTFI export permits for the next one year,” he said.

AMNTHead of Corporate CommunicationKartika Oktaviana said the opening of the tap for raw mineral exports had no impact on the company’s plans to build asmelter.”We have met the smelter verification target, so the easing has no impact on us,” explained Kartika to Kontan, Wednesday (28/4).

Previously, President Director of PT Amman Mineral Nusa Tenggara (AMNT) Rachmat Makkasau, had discussed the development ofsmelterconstructionin West Sumbawa, West Nusa Tenggara (NTB).Rachmat emphasized that the company that operates the Batu Hijau mine in KSB is always committed to building asmelteras mandated by the government.

The plan is for Amman to build asmelterprojectwith a concentrate input capacity of 900 thousand tons per year, in Benete, KSB, with a completion plan in 2023.

“This target is in accordance with the Minister of Energy and Mineral Resources Regulation No.17 of 2020, in which business actors can make adjustments to the smelter project completion schedule until 2023, “explained Rachmat some time ago.

The 900 thousand tons capacity has been adjusted from the previous capacity plan, which reached 1.3 million tons per year.This capacity adjustment was carried out due to development challenges due to the COVID-19 pandemic.”We have to improve the protocol to prevent the spread of the virus by limiting access in and out of thesmelterareain our operational area,” he explained.

In addition, it was stated that Amman’s business partners also experienced travel restrictions.Even so, the company is trying to adapt quickly so that it can continue to achieve the targets that have been set.With a lower capacity, it is hoped that the target project completion schedule can be achieved.

In addition, adjustments have also been made to adjust the concentrate supply capacity that can be produced from Batu Hijau and the potential for the Elang block in the future.Currently, several EPC(Engineering, Procurement, and Construction)consortiums- contractors that buildsmelters– are in the final evaluation stage.

In the future, Amman aims to complete the process of determining the winner of the EPC tender in the near future.The licensing process related to construction, logistics, and buildings also continues to be carried out in parallel with the support of the local government.

Verification of the progress of thesmelterproject for theperiod August 2020 to January 2021 was completed in March 2021.From the verification results, the total physical progress of theAmmansmelterreached 26.6% of the target set by the government of 26.7%.

This means that the percentage of achievement of physical progress towards the development plan up to January 2021 is 99.35%, exceeding the minimum target of 90% every 6 months.Amman’s success in continuing to achieve the targets set by the government is a manifestation of Amman’s commitment to supporting the government’s efforts to build derivative industries.

This National Strategic Project is also the result of good coordination between Amman with the Ministry of Energy and Mineral Resources and also the Coordinating Ministry for the Economy.