PT Antam (Persero) Tbk has signed a Memorandum of Understanding (MoU) with PT Freeport Indonesia to work cooperatively to evaluate the feasibility of developing a joint US$2.2 billion copper smelter.

The MoU was signed earlier this month in Jakarta by Antam’s president director Tato Miraza and PT Freeport Indonesia’s president director Rozik B Soetjipto. PT Freeport, the local unit of US mining giant Freeport-McMoRan Copper & Gold, owns and operates the Grasberg gold and copper mine in Papua, Indonesia.

The purpose of the MoU is to explore the technical, economical, and commercial feasibility of the development, construction and operation of a copper smelter project.

Tato Miraza said: “The signing of the MoU reflects the commitment of both companies to support the intention of Law Number 4 Year 2009 to increase and optimize the value of minerals through domestic mineral processing and refining.”

He said his firm was perfectly placed to benefit the US miner. “Our experience shows that we can potentially create value [for the project].” He did not say when the construction of the smelter would start as it would depend on the results of the study, but he said constructing smelters could take between two and three years.

Roziq Soetjipto said the $2.2 billion estimate was taken from an earlier study carried out by Canadian consultancy Hatch Engineering. He said the new study would include Antam in developing supporting facilities and infrastructure for the smelter and may take three months to complete. Should the outcome be positive, Freeport Indonesia and Antam will follow up with a more concrete plan.

The proposed smelter will annually produce 300,000 tonnes of copper cathode and needs around 1.2 million tonnes of concentrates for this purpose.

Freeport Indonesia has identified four possible locations for the planned smelter, of which three are in the East Java city of Gresik, north of provincial capital Surabaya, where PT Smelting runs the country’s only copper smelter. Another possible location is Amamapare, a port town in Papua.

Roziq Soetjipto said that Freeport Indonesia hoped other companies, like state-owned fertilizer producer Petrokimia Gresik (Petrogres) and state-controlled cement maker Semen Indonesia would be interested in the project. Petrogres’ fertilizer plant is adjacent to the smelter owned by PT Smelting.

Petrogres has been utilizing sulphuric acid from the smelter operated by PT Smelting, which is 25% controlled by Freeport Indonesia. Sulphuric acid is a smelter by-product used to produce fertilizer.

In terms of downstream mineral processing, Antam’s Tayan Chemical Grade Alumina plant in West Kalimantan is in commissioning phase. Antam also continues to work on the Pomalaa Ferronickel Plant Expansion project and the East Halmahera Ferronickel project. The company also continues to evaluate the feasibility study and selection of a strategic partner for the Mempawah Smelter Grade Alumina project and Nickel Pig Iron project. or

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