President Joko “Jokowi” Widodo has laid the foundation stone for a giant smelter belonging to copper and gold mining firm Freeport Indonesia in the East Java town of Gresik.

The smelter is built on 103-hectare land at the Manyar Special Economic Zone at a cost of US$3 billion, according to government data.

Jokowi said the smelter would be able to extract 1.7 tonnes of copper from ores and 6000 tonnes of gold annually.

“The single-line smelter we are going to build will be the biggest in the world because it has a capacity of extracting 1.7 tonnes of copper a year,” the president said in a ceremony to mark the start of the construction.

Freeport Indonesia operates the giant copper and gold mine at Grasberg in Papua.

He added Indonesia had the seventh biggest copper reserves in the world after Chile, Australia, Peru, Russia, Mexico, and the United States.

“Only a few of us have knowledge about this,” he said.

Lack of processing facilities
Jokowi said that despite having mines and mineral reserves, Indonesia could not reap the fullest benefit in the metal industry due to a lack of processing facilities, in comparison to countries like Japan and Spain which have higher value-added components in their manufacturing process.

“That’s why we built the Freeport smelter here in Gresik,” the president said.

The Indonesian government has a 51 percent stake in the local unit of US mining giant Freeport McMoRan.

The construction stage alone is expected to create 40,000 jobs for locals, Jokowi said.

State-Owned Enterprises Minister Erick Thohir said Freeport Indonesia had been performing well since the government secured a commanding stake on December 21, 2018.

Freeport’s revenues were estimated to more than double from Rp 50 trillion last year, Thohir said.

Soaring global copper prices and increased output in Indonesia would add to the pace of the company’s growth, he added.

“The company booked a net profit of approximately Rp 10 trillion last year and we expect the figures to reach Rp 40 trillion by the end of this year,” Thohir said.

Article by AsiaPacificReport.nz