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Smelter industry urged to develop domestic market amid tight competition
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Copper smelter company PT Smelting president director Hiroshi Kondo (second left) talks to the press about the company's targets in 2019. The company aims to produce 291,000 tons of copper cathode this year. (JP/Stefanno Reinard Sulaiman)
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T Smelting, the only copper refining company in the country for the past 20 years, will soon face new competitors as the government is pushing miners to build their own smelter.
There are two copper smelters in the pipeline, one from gold and copper miner PT Freeport Indonesia and another from local miner PT Amman Mineral with a planned processing capacity of 3.3 million tons of copper concentrate.
Both Freeport and Amman are regular concentrate suppliers for PT Smelting, which has a smelter in Gresik, East Java. This year, the smelter received a total of 1.1 million tons of copper concentrate.
When asked about the situation, PT Smelting president director Hiroshi Kondo acknowledged the imminent challenge, saying in five years it would be a difficult time for the company. Its shareholders are mainly Japanese firms.
“I think it [refining business] will no longer be a lucrative market five years from now. Even though we’re not afraid of [the challenges that lie ahead], it might be a difficult time for us,” he said during a press visit to the Gresik smelter.
The supply of concentrate might not be a problem as Freeport Indonesia holds 25 percent of shares in PT Smelting and the prospective smelters would not be enough to process all of the concentrate supply, the company said.
PT Smelting has been catering to copper cathode needs. Copper cathode is used in the tubing, wire and cable industries for both the domestic market and export markets to Asian countries such as Malaysia, Thailand and Vietnam.
