Bandung, Indoneisa Sentinel — Indonesia Minister of State-Owned Enterprises (BUMN), Erick Thohir, announced that the new copper smelter in Gresik, East Java, could significantly contribute to the national economy. According to Erick, the smelter, operated by PT Freeport Indonesia (PTFI), is projected to generate up to Rp 80 trillion (USD $5.2 billion) in revenue for the country.
Erick Thohir shared that the smelter’s financial contribution would come from various sources, including taxes, dividends, royalties, and income tax.
“The smelter is expected to bring in around IDR 80 trillion in the form of taxes, royalties, income tax, and dividends,” Erick stated on his social media post September 27.
The financial boost is part of Indonesia’s broader push for downstream processing of its mineral resources, a key government initiative.
Beyond direct contributions to the state’s revenue, the smelter is expected to have a multiplier effect on local economies, benefiting small and medium-sized enterprises (SMEs) and downstream industries in the surrounding area.
“Downstreaming will deliver maximum benefits to Indonesia’s economic growth, creating a ripple effect for SMEs and downstream industries near the smelter,” Erick added.
The PT Freeport Indonesia smelter, which represents a Rp 58 trillion investment (USD $3.7 billion), is the largest single-line copper smelter in the world. Constructed over a 30-month period, the facility spans 104 hectares and is one of Indonesia’s National Strategic Projects.
As part of Indonesia’s efforts to refine its own mineral resources, the smelter allows for the full domestic processing of minerals, in line with the government’s mining policies.
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This smelter single-line copper refining facility will primarily be producing copper cathodes. It is equipped with key components, including a copper smelting and refining plant, as well as a precious metals refining unit, along with a range of supporting infrastructure.
It will process copper concentrate into copper cathodes, with an annual refining capacity of 1.7 million tons of copper concentrate, producing 650,000 tons of copper cathode per year.
In addition to copper refining, the smelter will also recover precious metals like gold and silver from anode sludge which is a byproduct of the smelting process. The smelter could 50 tons of gold and 220 tons of silver per year. This further enhances the value of the facility and its contribution to Indonesia’s downstream mineral processing sector.
