Jakarta, Indonesia Sentinel — PT Freeport Indonesia (PTFI) has estimated that repairs for its smelter in the Gresik Special Economic Zone (KEK), East Java, which caught fire in 2024 in will cost approximately $130 million or around Rp2.13 trillion.
The estimated figure was delivered by Freeport President Director Tony Wenas during a hearing with Commission VI of the Indonesian House of Representatives (DPR) at the Parliament Complex in Jakarta. “The estimated damage cost so far is around $130 million,” said Tony on Thursday (March 13), as reported by Kumparan.
Tony assured that the entire repair cost would be covered by insurance. “This will be fully covered by insurance,” he stated.
He further explained that about 30% of the 3,500 damaged items need replacement, while the remaining 70% can still be used.
To expedite the repair process, Freeport plans to deploy 2,000 workers on a two-shift system, focusing on repair work, procurement, construction, and installation. The workforce is expected to grow as materials arrive.
“We are accelerating the repair process by utilizing wide-body cargo aircraft, including Boeing 747s and three Antonov AN-124 flights, transporting over 300 tons of materials,” Tony added.
Despite the setbacks, Freeport remains committed to its original timeline. Tony stated that repairs are expected to be completed by the third week of June 2025, with smelter production starting up in the fourth week of June.
Smelter Fire Incident and Investigation
The fire at Freeport’s Gresik smelter occurred on October 14, 2024, at approximately 5:45 PM local time, affecting the sulfuric acid plant. Following a comprehensive investigation by Indonesia’s Ministry of Energy and Mineral Resources (ESDM), authorities concluded that the incident was a force majeure event.
“The investigation has been completed, and the fire was classified as a force majeure event. There was no intentional wrongdoing. If it had been deliberate, the insurance would not have paid out,” said Tri Winarno, Director General of Minerals and Coal at the ESDM Ministry, on February 17, 2025.
Copper Export Concessions
Freeport’s operations claimed to be significantly impacted, as the smelter fire preventing the company from processing its mined materials. The company has then requested an export relaxations to the government to continue its export on copper concentrate during the smelter reparations.
In response, the Indonesian government granted Freeport a temporary export permit for copper concentrate under emergency conditions.
Energy and Mineral Resources Minister Bahlil Lahadalia confirmed that Freeport received an export permit under the newly issued Ministerial Regulation (Permen) ESDM No. 6/2025. The government has allocated a copper concentrate export quota of approximately 1 million tons, with the permit valid for six months.
“This permit is valid for six months from the date of issuance. We will review progress every three months to monitor the repairs at the affected plant,” Bahlil told reporters on March 7, 2025.
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Despite receiving government approval, Freeport has yet to secure an official export recommendation from the ESDM Ministry. Wenas stated that the company is currently in the process of obtaining the necessary approvals.
“We need to revise our Work Plan and Budget (RKAB) before exporting. The revised RKAB has been submitted and approved by the Directorate General of Minerals and Coal,” Tony said during the DPR hearing, as reported by Bisnis.
The export recommendation is currently under review at the ESDM Ministry. Once granted, the final approval will be in the hands of Indonesia’s Ministry of Trade. Freeport must obtain an export permit from the Ministry of Trade before it can continue to export its copper concentrate.
(Raidi/Agung)
