Jakarta, Indonesia Sentinel – Indonesia’s Minister of Energy and Mineral Resources (ESDM), Bahlil Lahadalia, is evaluating an extension of PT Freeport Indonesia’s (PTFI) copper concentrate export permit, which expired on December 31, 2024. This development comes after a fire damaged Freeport’s copper smelter facility in Gresik, East Java, in October 2024.
Minister Lahadalia stated that the decision regarding export relaxation will be discussed with President Prabowo Subianto during a limited cabinet meeting.
“We will bring this matter to the President. Freeport’s smelter is complete, but due to the fire at the sulfuric acid plant, the situation warrants a review,” Lahadalia said during a press briefing at the Ministry of ESDM office on Saturday, January 4, 2025.
Freeport Regulatory Background and Current Challenges
PTFI was initially granted an exemption from Indonesia’s ban on raw mineral exports, as stipulated in Trade Ministerial Regulation No. 22 of 2023, which allowed exports until December 31, 2024, under Regulation No. 10 of 2024. This relaxation was given due to the smelter’s capacity constraints, which prevented it from achieving 100% operational efficiency.
Despite the fire incident, Minister Lahadalia emphasized that Freeport must expedite the smelter’s repair process. “I have met with Freeport, and I requested them to accelerate repairs. Initially, their target was August 2025, but we pushed them to aim for May or June,” he explained.
The minister added that discussions with President Prabowo would address how to manage the situation until mid-2025, pending the smelter’s completion.
Erick Thohir Targets Early 2025 for Freeport Share Divestment
Meanwhile, Minister of State-Owned Enterprises (BUMN), Erick Thohir, aims to finalize the divestment of an additional 10% of Freeport Indonesia’s shares by the first quarter of 2025.
“We are trying to complete it by Q1 2025,” Erick said during a briefing in Jakarta on December 24, 2024. He acknowledged the complexity of the process but did not elaborate on the challenges.
The divestment aligns with former President Joko Widodo’s directive to increase government ownership in Freeport before his term ended. Upon completion, Indonesia’s government will own 61% of Freeport Indonesia, consolidating its control over one of the world’s largest copper and gold mining companies.
Economic Implications of Increased Ownership
The divestment is expected to significantly boost Indonesia’s economy. With a majority stake, the government stands to benefit from 80% of Freeport’s revenue, including royalties, corporate taxes, employee income taxes, export duties, and other revenues.
Minister Thohir emphasized that this increased ownership will secure substantial financial returns for the country while ensuring more robust management of Indonesia’s natural resources.
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Looking Ahead
The twin issues of smelter repairs and share divestment highlight the critical role of PT Freeport Indonesia in the country’s economy. While the government deliberates on export extensions and ownership consolidation, the decisions made in the coming months will set the stage for Indonesia’s mineral resource strategy in the future.
(Becky)
