Source : https://www.argusmedia.com/en/news/2235796-freeport-going-it-alone-on-indonesian-copper-smelter
US-based mining firm Freeport-McMoRan has decided to build a copper smelter by itself in Indonesia after negotiations about a joint venture with Chinese steel and nickel firm Tsingshan Holding and other companies broke down.
The new copper smelter and related refinery will be built in east Java province, utilising the company's Grasberg copper mine in west Papua province, 2,600km away. The smelter is a commitment Freeport-McMoRan made to the Indonesian government in 2018 to extend its mining rights at Grasberg.
Freeport Indonesia on 15 July announced that it has signed an engineering, procurement and construction contract worth $2.7bn with Japanese engineering company Chiyoda, a subsidiary of Japanese trading house Mitsubishi, which will oversee the smelter's construction. The smelter is designed to process 2mn t/yr of concentrate, with construction planned to finish by December 2023.
Delayed development and increased expenditure in the wake of the Covid-19 pandemic had partially prompted Freeport to bring in a partner.
"Tsingshan Holding Group is a perfect co-operator for Freeport in Indonesia, because Tsingshan has invested in the country for many years and owns aluminium, nickel and stainless projects there and is familiar with the country's policy," said a Chinese company official based in Indonesia. "Also it can use sulphuric acid, a by-product of copper smelting to process nickel sulphate, one kind of raw material for new energy batteries and is also one of Tsingshan's target products."
"The two counterparties failed to reach a mutual agreement finally in early second quarter, and there were other companies negotiating with Freeport for co-operation, it seems all failed," the official added.
Freeport Indonesia is responsible for financing for the new smelter project funded by debt which, according to the shareholders agreement, will be shared 51pc by Indonesian state-owned mining firm Inalum and 49pc by Freeport-McMoRan. Financing is estimated at nearly $3bn.