Increasing Industrial Downstream, Freeport Smelter in Gresik Inaugurated

In order to increase added value to the economy and maintain national economic resilience, the government has initiated a downstream industry policy. For this reason, the role of domestic off-takers and users of copper raw materials is considered very important in making it a success. The supply of copper downstream products that Indonesia currently needs still relies on imported products. One of them is copper tube, copper tape, copper evaporator, as well as components needed in Electric Vehicle (EV) production such as cables, inverters, and batteries. In order to meet these needs, the government continues to encourage processing industries in Special Economic Zones to carry out downstream processing.

“We applaud the extraordinary management. And what was built is an extraordinary, extraordinary factory. So, this is very timely, because currently renewable energy is becoming a trend. And the renewable energy trend requires critical minerals. And one of them is copper,” he said Coordinating Minister for Economic Affairs Airlangga Hartarto Airlangga in a written statement, Friday (28/6/2024). This was conveyed by Airlangga, at the Inauguration of PT Freeport Indonesia (PTFI) Smelter Operations in the Gresik Special Economic Zone.

The PTFI smelter is the largest single-line copper refining facility in the world with a refining capacity of 1.7 million tons of copper concentrate per year. The project, which occupies 100 hectares of land in the Java Integrated Industrial Ports Estate (JIIPE) KEK, Gresik, East Java, has a cumulative investment value of IDR 58 trillion or around US$ 3.7 billion.

This investment will not only provide benefits for domestic construction companies but will also create multiplier effects for the people of Gresik Regency.

Together with the smelter operated by PT Smelting, the two will refine 3 million tons of copper concentrate per year with a production of around 600,000 tons of copper cathode, 50 tons of gold and 200 tons of silver per year.

With the operation of this smelter, all copper concentrate produced by PTFI can be processed and refined domestically, as can the anode sludge from PT Smelting.

“And this is the first integration from the mine to the final product. And with this integration, the gold production of 50 tons will pay royalties. Because this is integrated from the mine to the downstream. Likewise for silver we also pay royalties. So, of course a lot of income will be obtained from thegovernment,” said Airlangga.

It is hoped that PTFI’s presence in the Gresik KEK can be an attraction in forming an area with an ecosystem that supports downstreaming, especially EVs. As of March 2024, the Gresik KEK has recorded an investment value of IDR 75.2 trillion and absorbed more than 35,000 workers.

“In the future Indonesia will be able to increase its exports. If our exports are strong, then our rupiah can be stable. For example, from nickel and from palm oil our exports are US$ 55 billion. So, oil imports are US$ 40 billion, it’s actually natural “hedging happened,” concluded Airlangga.

June 28, 2024, detikFinance

(https://finance.detik.com/industri/d-7414063/resmikan-smelter-freeport-di-gresik-airlangga-dorong-hilirisasi-industri)