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The House of Representatives is pushing the government to make copper giant PT Freeport Indonesia establish its smelter in Papua, increasing concerns over whether the company will be able to complete development by 2017 when a full ban on ore exports will be implemented.
The House’s leaders brought up the Papua smelter issue during a meeting with President Joko “Jokowi” Widodo on Monday.
The House’s deputy speaker, Agus Hermanto, claimed that the President had agreed that Freeport Indonesia should build its smelter close to its mine in Papua instead of following its plan to build in Gresik, East Java. “I say many problems will arise if the smelter is built in Gresik,” Agus said after the meeting, without elaborating.
Freeport Indonesia, a subsidiary of US-based giant miner Freeport-McMoRan Inc., is required to build a copper smelter in the country as a consequence of the 2009 Mining Law that requires mining firms to process and refine their minerals in domestic facilities.
Recently, the company said that it had signed a memorandum of understanding (MoU) to lease 80 hectares of land belonging to PT Petrokimia Gresik, located adjacent to the only copper smelter in the country, operated by PT Smelting Gresik.
The governor of Papua expressed his disappointment last week with Freeport Indonesia’s decision to choose Gresik for the US$2.3 billion-smelter location.
House speaker Setya Novanto said that building a smelter in Papua would increase Freeport Indonesia’s contribution to the country and the Papuan residents.
“The President agreed with us. Freeport has only contributed Rp 6 trillion [US$472.58 million] so far, while the government has disbursed Rp 35 trillion in special autonomy funds [for Papua],” Setya said.
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