The Indonesian government has rejected PT Freeport’s request to postpone the schedule for the construction of a new smelter in Gresik, East Java province, according to local media reports in Indonesia. The initial target could have been completed by 2023, but now Freeport has asked to postpone it to 2024.
Direktur Jenderal, director general of minerals and coal at the Ministry of Energy and Mineral Resources, said this is because the construction of the smelter is in line with obligations under Law No. 3 of 2020 on minerals and coal, which encourages mining companies to undertake downstream mining and also becomes a commitment of Freeport under the Special Mining Operations License (IUPK).
He also asked Freeport not to give up easily for any reason, and he did not want Freeport to say that it does not have the capacity until Freeport finishes on time in 2023.
PT Freeport Indonesia Vice President Jenpino Ngabdi had previously said that the progress made is still below target because the EPC contractor is unable to finalize the EPC contract due to Covid-19 and that the EPC supplier and contractor are currently encountering obstacles due to Covid-19 restrictions and therefore cannot complete the work effectively.
He stated that if we force completion of the work by the end of 2023, the EPC contractor has indicated that it will not be able to complete the work and therefore a new schedule will need to be revised. Therefore, we would like to request an extension of the settlement period for the smelter to 2024, if possible.