Nethy Dharma Somba, The Jakarta Post, Jayapura | Business | Fri, March 06 2015, 6:24 AM
One of the world’s copper and gold giants, PT Freeport Indonesia, has pledged that it would process some of its copper concentrate at a smelter to be built by the Papua provincial administration and its Chinese partner in the province’s regency of Timika.
The company’s president director Maroef Sjamsoeddin said that Freeport would continue cooperating with the Papua provincial administration.
“That way PT Freeport does not need to build a smelter at its own expense because the Papua provincial administration has expressed a willingness to build one,” Maroef said in Jayapura on Wednesday night.
In cooperation with Chinese investors, the Papua provincial administration plans to build a smelter with a capacity of 900,000 tons per year in Timika, which is located near the mining giant’s mines. The plant is expected to begin operation by 2020.
Maroef said the provincial administration’s decision to build the smelter, paying for it out of its own funds and not out of Freeport Indonesia’s, was made during the visit of Energy and Mineral Resources Minister Sudirman Said to the smelter development site in Timika.
Freeport processes a small part of its copper concentrate in a smelter in Gresik, East Java. Under the new mining law, all miners should process their mineral production in local smelters. The government has asked Freeport to build a new smelter in Papua, but the company prefers to build one in Gresik, near the existing one.
Maroef said that by 2017 Freeport would close its open-pit mine in Grasberg and would focus on its underground mining, which is predicted to produce 2 million tons of concentrate a year.
Previously Papua Governor Lukas Enembe said that the planned smelter would cost Rp 13 trillion (US$1 million). The facility is expected to be able to start operation by 2020 as construction will take some 54 months to finish.
The site for developing the smelter is located in Poumako, Timika, covering an area of 650 hectares. The site is also to be developed into an industrial center.
“The site is ready to develop as it already has spatial planning, an environmental impact analysis [amdal[, a cement packing industry and is located only some 3 kilometers from the port site,” Lukas said.
Papua Mining Agency head Bangun Manurung said the smelter would not use the planned PLTA Urumuka plant to supply its need for electricity, as the power plant was still in the planning process and would need a long time to complete.
“There is no guarantee that in five years PLTA Urumuka will be operating already. That’s why we will use another technology,” said Manurung, who is also chairman of the smelter development team.
He said the smelter facility would use Canadian technology that was developed by ENFI, a subsidiary of the NFC Non Ferrous China Company, and use a gas-fueled power plant (PLTG).
“This is a continuous process system; the heat produced can be used to generate electricity so that it will not need a huge supply of electricity,” Manurung said. The facility will need a total electricity supply of up to 50 megawatts (MW), in which 10 MW is for the smelter, 20 MW is for the refinery and the remaining 20 MW is for the utilities. The PLTG will be built near the smelter and refinery, using GE technology.
The whole compound of the facility will hold a copper smelter, a copper refinery, a gold and silver refinery, a sulfate acid factory, an oxygen factory and a steam-fueled power plant (PLTU) using coal as raw material or a PLTG. The project is to be funded by the Bank of China.
Manurung said that within the next six months his team would work on the licenses for the smelter development site as it would also be developed into an integrated industrial area for Timika.
“Most importantly, within the next six months, hopefully, the MoU [memorandum of understanding] with PT Freeport on its concentrate supply for the smelter will be already done. If Freeport does not supply the concentrate it will raise a big question mark,” Manurung said