Copper smelter deadline pushed back

The government has decided to push back the 2017 deadline for the completion of domestic copper cathode smelters to 2019 amid little progress and new plans being put in place, reports said on Friday.

The decision was taken following a meeting between the Ministry of Energy and Mineral Resources and four copper mining firms including PT Freeport Indonesia, PT Newmont Nusa Tenggara, PT Gorontalo Mineral and PT Kalimantan Surya Kencana on Wednesday, Kontan daily reported.

Director General of Mineral and Copper R. Sukhyar said that given the huge funding requirement, the government can understand that it?s difficult for individual copper firms, particularly smaller ones, to build the required domestic copper cathode smelter on their own.

In addition to the four copper firms holding the KK mining contract of works, there are 68 other smaller copper firms holding the IUP mining permits.

Sukhyar said that government is encouraging some of the smaller firms to team up in building the required smelter, and would also allow them to partner with other investors.

?So this means that there may be some changes to the original plan. If it brings consequence that (the smelters) can?t be ready by 2017, then we?ll adjust the regulation (deadline),? he said as quoted by Bisnis Indonesia daily.

The government has initially set a 2017 deadline particularly for PT Freeport and PT Newmont to complete the required domestic smelter as part of agreement to allow them to continue copper concentrates export following the introduction of mineral ores export ban policy in January of 2014.

PT Freeport plans to build a copper cathode smelter in Gresik, East Java. PT Newmont will not build its own smelter, but plans to supply its copper concentrates to PT Freeport?s smelter. This arrangement, however, may change.

Meanwhile, the Papua provincial administration is also planning to develop a 900,000 tons per annum copper cathode smelter in the province, teaming up with China Nonferrous Metal Mining. The project is expected to be completed in 52 months.

Sukhyar, however, said the government has yet to decide whether miners would still be allowed to continue copper concentrates export after 2017.

Under the existing regulation, mineral concentrates export would no longer be allowed by 2017, by which time the required domestic smelters were expected to have already been completed. (*)