Freeport-McMoRan to Spend $17 Billion on Indonesian Expansion

By Eko Listiyorini and Yoga Rusmana

Freeport-McMoRan Inc. (FCX) said it plans to invest about $17 billion to build a copper smelter and develop its gold and copper mines in Indonesia.
Unit PT Freeport Indonesia will build the smelter in East Java at a cost of more than $2 billion, President Director Maroef Sjamsuddin, told reporters in Jakarta today. It will spend another $15 billion on long-term development of underground copper and gold deposits at its Grasberg mine complex in Papua, he said.
The Southeast Asian country banned exports of raw minerals and imposed export duties for some processed metals including copper concentrate from January 2014 to encourage investors to build value-added processing plants in the country. Freeport has been in talks with the Indonesian government on its Contract of Work amendment, in which building a new smelter is one of the key points of the discussion.
“We’re complying with the government rule and the Mining Law,” said Sjamsuddin, who was appointed as new president on Jan. 7. The smelter will process 2 million tons of copper concentrate a year, he said.
Freeport will sign a memorandum of understanding with state-owned petrochemical company PT Petrokimia Gresik today on acquisition of land for the smelter, Sjamsuddin said.
Freeport Indonesia runs Grasberg copper and gold mine on Papua province. It has a 25 percent stake at PT Smelting, the country’s only copper smelter, in Gresik, East Java.