Jokowi Inaugurates the Construction of the World’s Largest Smelter

President Joko Widodo inaugurated the laying of the first stone of development smelter PT Freeport Indonesia in the Special Economic Zone (SEZ), Gresik, East Java on Tuesday (12/10). Smelter which is built on an area of ​​100 hectares is claimed to be the largest in the world.

“Earlier we received a report that smelter which will be built by design single line This is the largest in the world, because it is able to process 1.7 million tons of copper concentrate per year. Ladies and gentlemen, can you imagine, 1.7 million tons, that if a small truck is raised it can usually carry 3-4 tons, that means how many trucks will be lined up here. If one truck only contains three tons, it means that there are 600 thousand trucks lined up here, imagine. This big once,” said Jokowi.

President explains development smelter PT Freeport Indonesia in this country is a strategic policy related to the copper mining industry, after Indonesia controlled 51 percent of the company’s shares. According to him, with smelter The added value of copper will be created domestically and the results can be enjoyed by the public, especially since Indonesia is one of the seven countries that have the largest copper reserves in the world.

The PT Freeport Indonesia smelter is built on 100 hectares of land which is projected to produce 1.7 million tons of copper concentrate per year.  (Setpres Bureau)

The PT Freeport Indonesia smelter is built on 100 hectares of land which is projected to produce 1.7 million tons of copper concentrate per year. (Setpres Bureau)

“We have to make the best use of this enormous potential, as much as possible for the prosperity of the people by creating the highest added value for our economy. Lest we have mines, we have concentrates, smelterHowever, the downstreaming is in other countries, as previously stated by the Minister, in Spain, Japan. The added value means those who enjoy them, here’s why smelter PT Freeport was built domestically, namely in Gresik, East Java,” he explained.

Jokowi revealed, with development meltIn this regard, he wants all industries, especially those related to mining and mineral and coal, to downstream in the country to increase the value of Indonesian commodities.

President Jokowi wants mining and mineral and coal-based companies to do downstreaming in the country.  (Setpres Bureau)

President Jokowi wants mining and mineral and coal-based companies to do downstreaming in the country. (Setpres Bureau)

“Don’t send raw, don’t send in kind” raw material, provide added value to the country, meaning that it will provide income higher for the state. Then create more jobs, this is an important goal for the people. And of course it makes our nation more independent, more advanced,” he said.

The presence of PT Freeport Indonesia in the Gresik SEZ, said Jokowi, is expected to be an attraction for other industries to enter the SEZ in East Java. Jokowi ensured that the government will continue to provide full support so that the investment climate in the country will improve. This desire can be realized through the development of supporting infrastructure, ease and certainty of doing business, and the availability of human resources.

Company Revenue Continues to Increase

SOE Minister Eirick Thohir reported that the performance, innovation and transformation of PT Freeport Indonesia continues to develop well. Erick gave an example that the company’s revenue growth rose 100 percent from last year.

“Last year, it was Rp 50 trillion, this year in December the plan is Rp 105 trillion. Then, last year’s net profit was IDR 10 trillion, it is planned to reach IDR 40 trillion until December,” said Erick.

SOE Minister Erick Thohir said PT Freeport Indonesia's revenue rose 100 percent from last year.  (Setpres Bureau)

SOE Minister Erick Thohir said PT Freeport Indonesia’s revenue rose 100 percent from last year. (Setpres Bureau)

He explained that the surge in profit was also triggered by an increase in production capacity, which was accompanied by an increase in copper commodity prices, and efficiency.

Smelter which was built with an investment value of Rp42 trillion, later, said Erick, will function as a copper refining facility to produce copper cathodes. Other than that, smelter it will also be used as a precious metal refining facility producing gold, silver and other precious metals. Smelter This will later produce an average production of 35 tons of gold per year whose transaction value is estimated to reach IDR 30 trillion.

In terms of transformation, Erick explained that within the next six months, PT Freeport Indonesia will cooperate with the Telkom Group to work on 5G. mining in the company area. According to him, this will be a first in Southeast Asia. As for the function of 5G mining this, is to maintain operational security and to protect workers in the mine.

“And also this is interesting in 5G mining there is a term for increasing connectivity rather than integration hyperconnect network, and planned also there, there is sophistication than autonomous car or autonomous from the large trucks used,” he said.

Indonesian Mining Products Enjoyed by Other Countries for Decades

Coordinating Minister for the Economy Airlangga Hartarto said the construction of the PT Freeport Indonesia smelter is historic because for decades other countries have benefited from copper reserves in Indonesia.  (Setpres Bureau)

Coordinating Minister for the Economy Airlangga Hartarto said the construction of the PT Freeport Indonesia smelter was historic because for decades other countries had benefited from copper reserves in Indonesia. (Setpres Bureau)

On the same occasion, Coordinating Minister for the Economy Airlangga Hartarto said: smelter This copper will have additional downstream facilities for refining precious metals (precious metal refinery) with an investment value of 200 million USD, which will produce 35-54 tons of gold per year, where the current gold price is at the level of 1,700 USD per year. troy ounce.

“So if the production is 35 tons, it’s worth 1.8 billion USD. If the production is 50 tons, it will reach 2.7 billion USD,” he explained.

He said, before there was smelter In Gresik, other countries such as Spain and Japan have benefited the most from the results of copper concentrate from PT Freeport Indonesia whose value has reached thousands of trillions over decades.

“So imagine for 40 years, which 2 billion USD on average is enjoyed by other countries, whether 70 percent goes to Spain, or to Japan. So today is a historic day, because all of this will be produced in Gresik,” said Airlangga

The added value must be bigger

Economic Observer Center of Reform on Economics (CORE) Indonesia Moh Faisal said development smelter by PT Freeport Indonesia is a great achievement. However, he warned, the government should not be satisfied with just building smelter just. According to him, the copper processed product that will be produced by smelter must have a large enough added value.

Built on a 100 ha land, PT Freeport Indonesia's smelter will be the largest single line smelter in the world.  (Twitter/jokowi)

Built on a 100 ha land, PT Freeport Indonesia’s smelter will be the largest single line smelter in the world. (Twitter/jokowi)

“This is a record, because it happened not only in copper but also in other mining products, such as nickel. The nickel already exists smelter in Morowali, there is already an industry, but only nickel is processed pic iron that one actually value addedis low, and then the results are directly exported, not channeled for industrialization in the country. Exported, later processed abroad, which means that the raw materials can be obtained from us, processed a little bit, now that’s a bigger added value that happens abroad,” he told Mouab.

Faisal also highlighted the employment of local communities around Gresik, East Java. The government must ensure that PT Freeport Indonesia actually employs local people, by conducting various adequate trainings. The reason is, this does not happen at PT Freeport Indonesia in Papua.

“For example, in Timika, until now, most of the workers employed are from outside, very few are local. Even though there are actually Papuans who have graduated from college in Jayapura, it is still difficult to enter. Even for positions that actually can still be done by graduate workers rather than local children, of course through training. For example, jobs such as operational director or operational manager can actually be done by local engineers. That’s what there is no access at all, even though it’s been decades,” he explained. [gi/ab]

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