Minister Rini’s Special Message in Determining Freeport Smelter Locations

The location of the construction of a PT Freeport Indonesia processing and refining plant (smelter) has yet to be confirmed. At present, the location determination is still under review.

Deputy Minister of Mining, Strategic Industry and Media Ministry of State-Owned Enterprises (BUMN) Fajar Harry Sampurno said there were three options for the location of Freeport smelter construction, namely West Papua, West Nusa Tenggara and Gresik, East Java. “So the three places were studied,” he said in Jakarta, Friday (1/2).

According to Fajar, there was a special message from BUMN Minister Rini Soemarno regarding the location of the smelter construction, namely the availability of electricity for smelter operations. So, the location of the smelter construction must have large electricity reserves because it requires a lot of electricity

One option for the electricity source can be by building a Hydroelectric Power Plant (PLTA). This is because the electricity source from the hydropower plant is relatively cheap.

Although there is no location certainty, Fajar targets a smelter to be built in five years. “Gresik is now 30-40 percent. So this is new, “he said.

Based on the 2018 quarter IV report issued by Freeport McMoran, the cost of building the smelter will be borne by each shareholder. “The new smelter will be borne by PTFI’s shareholders in accordance with their respective long-term share ownership,” quoted Monday (1/28).

Freeport McMoran has shares of 48.76%, and Inalum or Indonesian ownership is 51.24%. Meanwhile, the total investment to build the smelter is US $ 3 billion or Rp. 42.2 trillion


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