Surabaya. Mining giant Freeport Indonesia’s new smelter in Gresik is expected to create a multiplier effect for East Java’s economy.

The company has invested approximately $3.1 billion to construct this smelter as of end-2023. Its construction process has provided job opportunities for 40,000 people. As many as 60 percent of the workers involved in the construction are East Javan locals. This smelter also has the potential to be a major booster to the province’s economy, according to Freeport Indonesia’s president director Tony Wenas.

“We believe the smelter can create huge multiplier effects for East Java’s economy,” Tony said at the Investor Daily Roundtable forum in Surabaya on Friday.

The smelter will produce 1 million tons of copper cathodes -- a mainstay ingredient for many industries, including electric vehicles (EVs). Tony added: “This will greatly expedite growth, be it in East Java or Indonesia’s overall economy.”

Tony talked of the appointment of Gresik as a special economic zone, which he said had unlocked new investment potentials. He also revealed why Freeport Indonesia picked Gresik as the smelter’s location, saying that the regional governments were very welcoming to new investments, even before Gresik was named a special economic zone.

“We also chose Gresik because of the manpower. There are also other industries in close proximity who will need our products or manufacturing waste,” Tony said.

According to Tony, Freeport Indonesia has not encountered any permit-related obstacles over the past 5 years of the smelter construction. 

“I guess that’s why the number of investments that East Java has attracted has jumped significantly compared to other regions because the province laid a red carpet [to the investors]. We have made the right choice by building this smelter in Gresik,” Tony told the forum.

Tony also underlined the importance of multi-stakeholder collaboration between the government, private sector, and other parties to grow East Java’s economy. 

"We have done that together and we will embrace [collaboration] even more. Because it will not only boost the economic growth for both East Java and Indonesia,” Tony said.

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