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Government encouraged to go it alone in building new copper smelter
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A heavy vehicle passes an open pit mining site at gold and copper miner PT Freeport Indonesia’s facility in Grasberg, Mimika, Papua. (JP/Nethy Dharma Somba)
T
he government may need to build a new copper smelter by itself rather than waiting for mining giant PT Freeport Indonesia to realize the development of its new processing facility, an energy expert has said.
The subsidiary of United States-based gold and copper miner Freeport McMoRan has been urged to develop a new smelter in Indonesia as mandated in the 2009 Mining Law in a bid to strengthen the country’s processing sector.
However, there has been no significant progress in the development of the new facility, despite the company’s claim it has allocated US$2.2 billion in capital expenditure for the new smelter.
“Rather than wasting our time further, the obligation to build such a smelter could be mandated to a state-owned holding company for the mining sector. It’s more realistic,” Center of Energy and Resources Indonesia (CERI) executive director Yusri Usman said on Tuesday.
Read also: No more special concessions for Freeport)
The government plans to form holding companies operating in different sectors with the aim of boosting the value and efficiency of all state-owned enterprises. At present, Indonesia has only one copper smelter, operated by PT Smelting Gresik in East Java, with Freeport Indonesia controlling a 25-percent stake in it.
“I’m pessimistic if we keep waiting for Freeport Indonesia to build its new smelter,” Yusri said. (ags)
