President Jokowi Signals Green Light for Extended Copper Export by Freeport
In Jakarta, Indonesian President Joko Widodo (Jokowi) has indicated plans to extend the copper concentrate export license for PT Freeport Indonesia (PTFI). This move comes as the current export permit approaches its expiration at the end of May.
“Yes, of course, we’ll extend it, but we’re still figuring out the charges,” Jokowi told reporters in Pasar Baru, Karawang, West Java, on Wednesday (8/5/2024).
The government is reviewing the Export Benchmark Price (HPE) for various mining commodities following a price increase noted in April 2024. Previously, the government had relaxed export requirements for Freeport and Amman Mineral as recognition of their significant investment in smelter development.
“We acknowledge Freeport and Amman Mineral’s effort for constructing the smelter, which is nearly completed,” Jokowi stated.
With the smelter construction from Freeport and Amman Mineral nearing full completion, it showcases the companies’ strong commitment to downstream processing within the country. “That’s a matter for the trade minister, but I think the completion of the smelter shows their strong desire for downstreaming in the country, which is very good and should be appreciated,” Jokowi added.
As of March 2024, the smelter operated by PT Freeport Indonesia in JIIPE, Gresik, East Java has reached 93% completion and is set to be the world’s largest single line copper concentrate smelter, aimed to commence operations in June 2024.
Contract Extension Until 2061
The Jokowi administration is showing signs of extending PT Freeport Indonesia’s contract until 2061, beyond the current end date in 2041. This is in conjunction with revising the Government Regulation No. 96 of 2021 regarding the Implementation of Mineral and Coal Mining Business Activities.
With this regulatory revision, Freeport Indonesia might apply for contract extensions anytime, moving away from the current requirement to wait until five years before or at most two years before the contract ends.
Should the contract extend till 2061, the government has stipulated a demand for an additional 10% share in the mine located in Tembagapura, Wamena, Papua. Furthermore, Freeport is also expected to construct a new smelter in Papua.
This expansion and extension of the copper export license mark a significant step for Indonesia’s commodities sector, focusing on enhancing in-country processing and increasing the nation’s benefit from its natural resources.