Freeport Begins Construction of $3bn Indonesian Copper Smelter

Planned to be commissioned in late 2023 or early 2024, the new facility will produce 1.7Mt a year of copper concentrate.

Freeport McMoRan has started construction of a $3bn copper smelter facility in Gresik, East Java, Indonesia.

Expected to be one of the biggest copper smelters in the world upon completion, this facility is located near Freeport’s existing refining operations in the country.

During the televised ground breaking ceremony, Indonesian President Jokowi Widodo said: “The smelter is built with a single line design, which is the largest in the world.”

The new facility is expected to have a production capacity of 1.7 million tonnes (Mt) a year of copper concentrate. It is planned to enter service in late 2023 or early 2024, reported Reuters.

The new smelter facility will also produce 600,000t of copper cathode, which will be generated from concentrate supplied by PT Freeport Indonesia’s Grasberg mine in Papua.

Additionally, it will feature a $200m precious metal refinery with the capacity to produce up to 54t.

Indonesia Coordinating Minister of Economic Affairs Airlangga Hartarto said the new copper smelter project will allow the country to benefit from exporting value-added copper.

The country has been exporting mostly copper concentrate for decades.

“This is historic because it will be produced entirely in Gresik. This project requires water, gas… The economic benefits are huge,” Hartarto added.

In February, Freeport was reportedly in deliberation with China’s Tsingshan Steel concerning a possible $2.8bn deal to build the new Indonesian copper smelter complex in either Weda Bay or close to the present operations in Gresik.

Reuters reported in July that Freeport McMoRan and Tsingshan had failed to arrive at an agreement.

During the same month, Freeport awarded the €360m engineering and technology contract and license agreements to Metso Outotec for the delivery of a new copper smelter facility in Gresik.

Japan’s Chiyodba’s Indonesian subsidiary, PT Chiyoda International Indonesia, was also selected as an engineering, procurement and construction (EPC) contractor for the project.