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Gresik, June 27, 2024 - The government has introduced an industrial downstream policy aimed at supporting the enhancement of the national economy’s added value and serving as a vital pillar in safeguarding national economic resilience. To support this downstream policy, the role of domestic off-takers, including copper raw material users, is crucial.
Moreover, Indonesia’s current downstream copper product supply still relies on imports, such as copper tubes, copper tapes, copper evaporators, and essential components for Electric Vehicle (EV) production, including cables, inverters, and batteries. To meet these needs, the government continues to promote downstream processing industries in Special Economic Zones (KEKs).
"We applaud the extraordinary management. And the plant built here is also extraordinary. This project is very timely because renewable energy is now a trend. Renewable energy trends require critical minerals, one of which is copper," said Coordinating Minister for Economic Affairs Airlangga Hartarto at the inauguration of PT Freeport Indonesia (PTFI) smelter operations in Gresik SEZ on Thursday (06/27).
The PTFI smelter is the world’s largest single-line copper refining facility, with a capacity to refine 1.7 million tons of copper concentrate annually. The project, covering 100 hectares in the Java Integrated Industrial Ports Estate (JIIPE) SEZ in Gresik, East Java, has a cumulative investment value of Rp58 trillion or around USD3.7 billion. This investment not only benefits domestic construction companies but also creates multiplier effects for the local community in Gresik Regency.
Along with PT Smelting’s smelter, both will refine 3 million tons of copper concentrate annually, producing around 600,000 tons of copper cathodes, 50 tons of gold, and 200 tons of silver per year. With this smelter in operation, all copper concentrate produced by PTFI can now be fully processed and refined domestically, including the anode mud from PT Smelting.
“This is the first integration from mining to the final product. With this integration, the future production of 50 tons of gold will pay royalties, as will silver. So, the government will obtain substantial revenue,” Coordinating Minister Airlangga explained.
PTFI's presence in Gresik SEZ is expected to be an anchor in forming an ecosystem supporting downstream processing, especially in EVs. As of March 2024, Gresik SEZ has recorded an investment value of Rp75.2 trillion and created more than 35,000 jobs.
“Indonesia will be able to boost exports. When our exports are strong, the rupiah can stabilize. For example, exports of nickel and palm oil bring in USD55 billion, while oil imports total USD40 billion. So, natural hedging can be achieved,” Minister Airlangga concluded.
In addition to the smelter inauguration ceremony, Minister Airlangga and his entourage also visited the PTFI smelter area, including the jetty, anode casting, and central control building. During a press conference, he addressed the media on the smelter’s role in supporting national economic resilience.
Attending the event were Investment Minister/Head of BKPM Bahlil Lahadalia, Secretary of Coordinating Ministry for Economic Affairs Susiwijono Moegiarso, Deputy III Elen Setiadi, Deputy V Ali Murtopo Simbolon, Acting Director General of Mineral and Coal Ministry of Energy and Mineral Resources Bambang Suswantono, Member of DPR RI, Ministry Spokesperson Haryo Limanseto, Acting Regional Secretary of East Java Bobby Soemiarsono, Gresik Regent Fandi Akhmad Yani, and President Director of PTFI Tony Wenas along with staff.