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plan by mining giants PT Freeport Indonesia, PT Aneka Tambang (Antam) and PT Newmont Nusa Tenggara to jointly develop a copper smelter has caused uncertainty over the supply of concentrate for other projects.

The director general for minerals and coal at the Energy and Mineral Resources Ministry, R. Sukhyar, said that Newmont Nusa Tenggara '€” a subsidiary of the US-based Newmont Mining Corporation '€” had decided to participate in a proposed copper smelter involving Freeport and Antam, with ownership being part of the deal.

It was previously reported that Newmont would only be supplying copper concentrate to the smelter.

'€œNewmont will participate in the smelter development. How much of a stake it will have is still under discussion,'€ Sukhyar said.

'€œThe discussion is still underway. Please ask [the ministry],'€ Newmont president director Martiono Hadianto said when asked for comment on Thursday.

Freeport '€” a subsidiary of US giant Freeport McMoRan Copper & Gold Inc. '€” and state-owned Antam are working on a pre-feasibility study regarding the development of the US$2 billion copper smelter.

The project follows the 2009 Mining Law, which requires mining companies to process raw minerals domestically to develop the country'€™s downstream industry.

The government has also banned mineral-ore exports since Jan. 12, while still allowing until 2017 the export of semi-finished products, such as concentrate, with the proviso that the concentrate producers are committed to developing smelters.

The results of Freeport-Antam'€™s pre-feasibility study are expected to be completed by the end of this month.

The copper smelter is designed to consume 1.6 million tons of copper concentrate per annum and to produce 400,000 tons of copper cathode per year, according to Antam'€™s president director, Tato Miraza.

The ministry'€™s mineral and coal directorate general previously said that under a smelter development road map, Freeport and Newmont would produce 3.4 million tons of copper concentrate a year, including 1.2 million tons that would be delivered to the country'€™s only copper smelter, operated by PT Smelting Gresik, in East Java for processing.

With another 1.6 million tons of copper concentrate going to the planned Freeport-Antam smelter, only 600,000 tons would remain available.

However, two other companies also have plans to build copper smelters.

PT Indosmelt will need around 500,000 tons of copper concentrate per year to feed its future copper smelter, while PT Nusantara Smelting Corporation will require 800,000 tons.

Indosmelt had signed a supply agreement with Freeport before the latter decided to collaborate with Antam, while Nusantara Smelting had signed a similar agreement with Newmont.

Indosmelt is unlikely to begin construction on its project later this month, as earlier planned, due to the question mark over supply.

'€œWe at Indosmelt and Nusantara feel aggrieved,'€ Indosmelt president director Natsir Mansyur said.

'€œWe will be humiliated if the plans for the smelters do not go ahead.'€

He added that his company had proposed revoking its concentrate supply agreement, but the idea was rejected by Freeport given that such a move would carry the consequences of a termination.

Nusantara Smelting'€™s director, Juangga Mangasi, shared similar concerns.

'€œWe need there to be a regulator in this matter. It'€™s not wise for the government to take the risk of putting too many eggs in one basket. What if the [Freeport-Antam] smelter is not completed?'€ Juangga said.