Freeport refuses to build smelter in Indonesia

 A giant mine run by US firm Freeport-McMoran Cooper & Gold Inc., at the Grassberg mining operation, in Indonesia's Papua province.

- International mining company, Freeport-McMoran Copper and Gold, refuses to build smelter in Indonesia. As cited in Reuters, the company said it was more than willing to supply any new copper smelters in Indonesia with raw copper concentrates but remained reluctant to build smelting operations itself.

"We have our contract of work and we are abiding by it. If there is any new smelting capacity built in Indonesia, we will make every effort to be able to supply concentrates," Javier Targhetta, Freeport's senior vice president of marketing and sales, said in an interview at the Metal Bulletin Copper Conference in Madrid on Thursday.

He added that smelting was a difficult business. "You have big capital expenditure and small or no margins at treatment charge and refining charge (TC/RCs), and I don't see TC/RCs improving in coming years," he said.

President Director of Freeport Indonesia, Rozik B Soetjipto, said on Friday that Freeport still studied the options of building smelter. Freeport Indonesia is ready to participate and support feasibility study (FS) to find out whether smelter is needed.

"Other alternative is that we are ready to cooperate with the third party which will build smelter to guarantee the supply of concentrate," he said.

Meanwhile, Minister of Energy and Mineral Resources, Jero Wacik, said Indonesia needed at least 20 smelters. "Out of 145 mining companies which propose the building of smelter, we only need 20," he said.

The building of smelter is ruled under Laws no. 4/2009 and supported by Ministerial Regulation no. 7/2012 which is revised to Ministerial Regulation no. 11/2012.

gsc