“Massive Mineral Reserves at PT Freeport’s Tembagapura Mine Predicted to Last Until 2052”

Jakarta, CNBC Indonesia – The PT Freeport Indonesia (PTFI) mine in Tembagapura, Timika, Papua, Indonesia has been operating since 1967. In fact, the mine which has been around for 56 years will still be able to produce an abundance of mines which is predicted until 2052.

For your information, PTFI’s mine located in Tembagapura has not yet been fully explored. PTFI notes that the current reserves can be mined up to 2052.

At least, there are still potential resources stored as much as 3 billion tons to be developed. Thanks to these reserves, potential revenue for the government could reach US$ 80 billion by 2041.

Chairman of The Board & CEO of Freeport-McMoRan Richard C. Adkerson revealed that PTFI’s mine located in Tembagapura Papua still holds large mineral reserves. In fact, these minerals can still be processed or processed more than 2041.

“We believe the existing resources (in Tembagapura) can exceed 2041. We also have to identify these resources through exploration and analysis. We are also in talks with the government so we can take this opportunity for stakeholders in this long-term project,” said Adkerson in a scientific oration at Hasanuddin University, Makassar, quoted on Saturday (6/5/2023).

With these very abundant reserves, Freeport has also drawn up plans to add investment up to 2041.

Investment disbursed amounted to US$ 18.6 billion, including the construction of a second smelter in Gresik, East Java. “In the next 20 years we plan to spend nearly US$ 20 billion, of which US$ 3 billion is for the construction of a smelter in Gresik,” said Adkerson.

Previously, President Joko Widodo (Jokowi) believed that mineral reserves ranging from gold to copper in the Grasberg mine, Freeport could be more than 20 times what they are today.

This potential, said President Jokowi, can be utilized domestically, so that it can create as many jobs as possible for the people.

“I believe it can be 20 times, sometimes not only raw materials, not copper, but gold we also send. How do we know? The smelter will produce maybe more gold than copper, but we don’t know yet because there is production at the smelter,” he said.

Previously, the Minister of Energy and Mineral Resources Arifin Tasrif said, until now the progress of the construction of Freeport’s newest smelter in Gresik, East Java has reached around 61.5% as of March 2023 with an expenditure of around US$ 1.5 billion. “We consider it because there is a pandemic. In June, now we are right now… if we can’t export what? OK, fine,” he said.

Another reason is considering the force majeure situation of the Covid-19 pandemic, so that it is considered not to violate the Minerba Law.

“We consider what has been built from the project, from the commitment. We consider the obstacles faced by the construction. During Covid, he was a Japanese contractor. Japan just how many years was the lockdown. Indeed, the engineering work is rather difficult to progress. If engineering is not progress, the purchase of procurement material is also not progressing,” he explained.

“There’s a force majeure problem, isn’t it true that a pandemic has an impact, right? The virus is dangerous,” he said.

On the other hand, President Director of PT Freeport Indonesia (PTFI) Tony Wenas said PTFI’s contribution to state revenues in the company’s 2023 Work Plan and Budget (RKAB) is targeted to reach US$ 3.498 billion. This target decreased slightly compared to the previous year due to several factors.

“For the 2023 RKAB, the revenue plan is US$ 3.498 billion, which is still more than Rp. 50 trillion. There is also a slight reduction from the work plan, even though metal production is estimated to be almost the same. 2.5% because the progress of the smelter has exceeded 30%. This is in accordance with the regulations in the IUPK,” said Tony in a hearing with Commission VII, Monday (6/2/2023).

However, if we look at the next few years, assuming a copper price of US$ 4 and gold at US$ 1,800 per ounce, according to Tony, state revenue in 2024 is targeted to increase to US$ 4.016 billion. While in 2025 it will decrease again to US$ 3.715 billion, and in 2026 it will increase again to US$ 4.070 billion.

“This decrease is usually because at that time we were mining. If you look at the production plan earlier, there was also an export duty which eventually became zero because the smelter progress was more than 50%,” he said.

(dce)