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Gresik Copper Smelter: Freeport Indonesia’s $3.7bn Project to Boost Renewables Supply”

Copper miner Freeport Indonesia launched its $3.7 billion copper smelter in Gresik, East Java on Thursday, driven by the growing demand for the metal amid the global transition to renewable energy.

The smelter has an input capacity of 1.7 million metric tons of copper concentrate and an output capacity of around 650,000 tons of copper cathode and 50 to 60 tons of gold, according to Tony Wenas, Chief Executive of Freeport Indonesia. The company is majority-owned by the Indonesian government but operated by US mining giant Freeport McMoran.

The facility is expected to produce its first copper cathode in August, initially operating at 50% capacity, with plans to reach full capacity by December.

“Copper going forward will be very much needed by the world,” Wenas stated. “Countries are racing to transition their energy sources to renewables and sustainable sources. This will need a lot of copper.”

Indonesia banned exports of all raw minerals starting June 2023 but granted Freeport Indonesia and rival copper miner Amman Mineral Internasional a dispensation until May 31, 2024, to complete their smelters. Both companies have requested an extension of the export permit until the end of 2024 to continue shipping copper concentrate while awaiting full capacity operations of their smelters. The government has indicated it will grant this extension.

Investment Minister Bahlil Lahadalia, who attended the launch, reiterated his support for the export permit extension following the launch of the Gresik smelter. He also urged Freeport to build another copper smelter in Papua, near its Grasberg copper mine.

A Freeport Indonesia spokesperson did not immediately comment on the government’s proposal for a Papua smelter or the status of the export permit extension. News website Bloomberg Technoz reported on Tuesday that Freeport had not yet obtained the extension.

Jakarta has provided Freeport Indonesia with a tax break for its investment in the Gresik smelter.

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