Copper miner Freeport Indonesia has sounded the alarm, cautioning the Indonesian government about the dire financial repercussions of enforcing a ban on copper concentrate exports, with potential losses amounting to $2 billion, according to a company official’s statement on Thursday.
Indonesia’s upcoming export prohibition, set to take effect in June, aims to incentivize miners to invest in domestic smelting facilities, thereby augmenting the value of their products and bolstering earnings from exports.
Freeport Indonesia, a subsidiary of mining behemoth Freeport McMoran, has appealed for leniency regarding the ban, citing concerns about its Gresik smelter, which may not be operating at full capacity by the designated deadline.
“If we can’t export, state revenues will drop by around $2 billion, based on current prices,” remarked Chief Executive Tony Wenas, a statement confirmed by a company spokesperson.
These remarks ensued after a meeting with President Joko Widodo, where Wenas was joined by Freeport McMoran’s chairman Richard Adkerson and incoming chief executive Kathleen L. Quirk.
Wenas reiterated the completion timeline for the Gresik smelter, slated for May, with operations commencing the following month and full capacity expected to be reached later in 2024.
However, a spokesperson for Indonesia’s mining ministry declined to comment, while the president’s office remained unresponsive to Reuters’ request for commentary.
Wenas had previously warned that failure to delay the ban would compel Freeport Indonesia to slash ore production by 40% this year.
In a similar vein, Indonesian copper miner Amman Mineral Internasional disclosed its negotiations with the government to ease the ban, citing unpreparedness of its smelter by May and emphasizing the significant tax revenues the government stands to lose from both Amman and Freeport.
During the meeting, Freeport also broached the topic of extending its mining permit. Widodo and Adkerson had previously convened in November to discuss increasing Indonesia’s ownership of Freeport Indonesia by 10% and extending its mining permit by 20 years beyond the current expiry date of 2041.
