Jakarta. Mining giant Freeport Indonesia expects its annual contribution to the Indonesian government to exceed $7 billion once production at its Papua mining operations returns to full capacity and its copper smelter complex in Gresik, East Java, is operating at full scale, President Director Tony Wenas said on Tuesday.

Tony said the milestone will be driven by the full operation of the company's new copper smelter and precious metals refinery, allowing the entire copper value chain -- from concentrate to refined copper, gold, and silver -- to be processed domestically.

“With the operation of the smelter and precious metals refinery in Gresik, Indonesia can now process the entire copper value chain at home. This marks a major step forward for the country's mineral downstream industry,” Tony said.

The new smelter has the capacity to process 1.7 million metric tons of copper concentrate annually. Together with the expanded PT Smelting facility in Gresik, Freeport's total domestic refining capacity has reached around 3 million metric tons per year.

The adjacent precious metals refinery can process 6,000 metric tons of anode slime annually, producing refined gold, silver, platinum group metals, and other by-products. State-owned miner PT Aneka Tambang (Antam) is expected to purchase all of the refinery's gold output.

Recovery Underway
The smelter's operations were disrupted after a fire damaged its gas cleaning plant in October 2024. Although repairs were completed and production resumed in May 2025, operations were interrupted again after a landslide at the Grasberg Block Cave mine halted concentrate supplies.

Freeport is using the current shutdown to carry out comprehensive inspections and optimize the facility before concentrate shipments from Papua resume in September 2026.

“Our priority is to restore mining operations safely so concentrate supplies can return to normal. Once the upstream operation has recovered and the smelter is running at full capacity, the benefits of downstream processing will become much more significant through higher metal production, stronger domestic industry, and increased state revenue,” Tony said.

Mining operations are expected to run at about 65% of capacity this year as recovery work continues. Output is projected to rise to around 75% in the first half of 2027 before returning to full capacity by the end of that year.

Copper production is forecast to increase from about 800 million pounds in 2026 to 1.2 billion pounds in 2027 and 1.6 billion pounds in 2028. Gold production is expected to rise from 700,000 ounces this year to 1 million ounces next year and 1.4 million ounces in 2028.

As production recovers, Freeport expects its payments to the government -- including taxes, royalties, dividends, and other obligations -- to increase from about $2.6 billion in 2026 to $4.7 billion in 2027 before surpassing $7 billion annually once operations return to full capacity.

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