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February 19, 2025 | 08:38 pm
TEMPO.CO, Jakarta - Indonesian Minister of Energy and Mineral Resources (ESDM) Bahlil Lahadalia stated that PT Freeport Indonesia (PTFI) has committed to completing the construction of its new copper smelter facility by June 2025. This followed the fire incident at PTFI's copper smelter in Gresik, East Java in October 2024.
"Thank God, yesterday, we decided by compromise that the factory will be completed in June (2025). Freeport has submitted its statement, and reports from the police and insurance have also been available," he said when met at the Indonesia Economic Summit event in Jakarta on Wednesday, February 19, 2025.
In addition, Bahlil mentioned that the government will reissue the raw copper export permit for Freeport after it has stalled since last December. According to him, the decision is a solution from the limited meeting held by Prabowo earlier this week.
"Yesterday, we had a limited meeting led by Bapak President, and then we looked for a win-win alternative. The win-win is how to keep Freeport's production running," said Bahlil.
He explained that the reason the government allowed copper exports despite the previous restriction on raw copper exports is the declining income of Freeport. He mentioned that, in any case, 50 percent of Freeport's shares are owned by the state.
In other words, if Freeport's income decreases, then the state's revenue will also decrease. Not only that, he said there are thousands of employees who are potentially laid off if Freeport is unable to export.
Nevertheless, the government still imposes sanctions on Freeport for exporting copper even though its export quota had expired in 2024. "The sanction is an increase in the export tax. So they pay more to the country than before," said Bahlil.
Previously, based on the Minister of Energy and Mineral Resources Regulation No. 7 of 2023, the export permit for copper concentrate of PT Freeport Indonesia had expired on December 31, 2024. With this decision, they could no longer export raw copper materials this year.
However, at the same time, Freeport experienced a fire at their smelter. This made them unable to process or refine the concentrate. On the other hand, concentrate storage also experienced overcapacity while the permit had not yet been issued.
This condition forced Freeport to reduce their production and automatically reduce income, which had an impact on the state's revenue and the workers there. "If, for example, the stockpile is full, then production will automatically decrease," said ESDM Ministry's Director General of Minerals and Coal, Tri Winarno, at his office on Friday, February 14, 2025.
Dani Iswara contributed to the writing of this article.
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