Freeport Indonesia Advocates for Extension of Copper Concentrate Export License
Freeport Indonesia is actively seeking an extension of its copper concentrate export license, a move underscored by President Director Tony Wenas's recent discussions with Indonesian government officials. Amid these discussions, Wenas, alongside Freeport McMoran's top executives, met with President Joko Widodo, emphasizing the critical need for license renewal to prevent a substantial drop in state revenue.
Without the extension, Tony Wenas predicts a potential loss of approximately $2.2 billion (around Rp30 trillion) in state revenue from June to December 2024. This is due to the anticipated reduction in production values, including a decrease in copper production from 1.7 billion pounds to 1.4 billion pounds, and gold output scaling down from 2 million to 1.6 million ounces.
The urgency for export license relaxation comes in the wake of government restrictions initiated in June 2023, which halted the export of various raw minerals, aiming to boost domestic processing and enhance mineral value within the country. Despite these restrictions, Freeport and three other companies were granted exemptions, attributed to their progress in smelter construction, allowing them to continue exporting copper concentrate until May 31, 2024, albeit with a 20 percent penalty on foreign sales and a 7.5 percent export duty.
In their meeting with President Widodo, Freeport officials also discussed the ongoing construction of their smelter in Manyar, Gresik, East Java, which boasts a 92 percent completion rate. Expected to commence operations in June this year, this facility represents a significant step towards increasing domestic mineral processing capabilities, with an annual processing target of 1.7 tons of concentrate and a production output of 600 tons of copper cathode.
