Jakarta. Freeport Indonesia has finished building its new smelter at the Gresik Special Economic Zone in East Java, and the mining giant is presenting this new facility as a present for Indonesia’s 79th Independence Day celebrations.

The mega project took less than 5 years to finish.

“We present the world’s largest copper single-line smelter --worth almost Rp 60 trillion-- for Indonesia’s 79th independence day. This is our present,” Freeport Indonesia’s president director Tony Wenas recently told Investor Daily.

According to Tony, everything is on track. On June 27, the facility started its engine and the process took around 6-10 weeks. “Everything is now connected. The heating has now stabilized and is kept at 800 degrees. We are hoping to start the concentrated feeding by the third week of August,” Tony said.

President Joko “Jokowi” Widodo is set to inaugurate the smelter in the fourth week of August. By then, the facility is set to already begin producing copper cathodes, although it will start at 50 percent production capacity. The smelter will run at full capacity in December 2024.

Tony admitted that the smelter project had faced some obstacles. Many were once skeptical of the smelter, some saying that its construction was merely an “empty promise” to get a permit extension. The Covid-19 pandemic has also taken a toll on the smelter construction.

The smelter project is an agreement made between Freeport McMoran and the Indonesian government. As part of the mining permit, Freeport has to construct a smelter five years after the government issued the mining permit in 2018. This is also not Freeport’s first smelter in the country. In 1996, the company set up PT Smelting with Japanese multinational company Mitsubishi handling the operations. About 66 percent of PT Smelting’s shares now belong to Freeport.

“The [freshly established] smelter integrates our business process,” Tony said, while adding that the copper products that the facility would punch out could supply electric vehicle (EV) and cable industries, among others.

Freeport sees huge potential as Indonesia seeks to switch to renewable energy. A 1-megawatt solar panel requires 5.5 tons of copper. A single megawatt of wind power plant needs 1.5 tons of copper. Tony added: “We can be part of the EV ecosystem. We can also support the government’s energy transition target.” 

China is the world’s largest copper consumer, consuming around half of the global consumption. The world consumes around 20-25 million tons of copper and is set to increase to 40-45 million tons by 2040-2050. As copper cathode demand grows, Indonesia can be a key player in the global supply chain thanks to the smelter. 

China also produces the most copper cathodes globally, reaching 12 million tons, followed by Chile (2 million tons), Congo (1.9 million tons), as well as Russia and Japan -- whose productions reach 1.4 million tons, respectively. Indonesia is set to produce 1.5 million tons of copper cathodes as PTFI has two smelters and another one owned by Amman Mineral who boasts a capacity of 500,000 tons -- possibly putting the country in the fourth position. Despite being a leading producer, China has to import its raw materials, unlike the resource-rich Indonesia.

Tony said he hoped Freeport Indonesia’s smelter would also help attract investment into Indonesia. China’s Hailiang Nova Material Indonesia has been building a copper foil factory since 2023. This factory will absorb copper cathode and eventually support the EV ecosystem.

"Apart from the job generation and local supply, the smelter can help attract foreign investment. East Java has been a leading investment destination over the past years,” he said.

Lawmaker Eddy Soeparno also commented on Freeport Indonesia’s smelter.

"We would like to extend our greatest appreciation to PTFI which has reached the operational stage according to the schedule agreed by the government. Hopefully, everything can run smoothly,” Eddy said.