Heavy machinery in operation at Freeport Indonesia’s Grasberg mining complex in Papua. (AFP Photo/Olivia Rondonuwu)

Kalla Tells Freeport Smelter Must Be in Papua

BY :NOVIANTI SETUNINGSIH & RANGGA PRAKOSO

JANUARY 30, 2015

Heavy machinery in operation at Freeport Indonesia’s Grasberg mining complex in Papua. (AFP Photo/Olivia Rondonuwu)

Jakarta. Vice President Jusuf Kalla said on Friday that mining giant Freeport Indonesia must build its smelter in Papua and not in Gresik, East Java, as the company had planned.

"Since the beginning we asked for [the smelter] to be in Papua," Kalla said at the vice president's office. "It is Freeport that will build it, not the government so we ask them to do so."

Kalla conceded that a lack of infrastructure, such as reliable electricity, made the Papua option more risky for the company. It was nonetheless obligatory for Freeport, the local unit of US mining company Freeport McMoRan, to build the smelter in Papua.

Last week, Papua Governor Lukas Enembe also expressed his disapproval of Freeport's plan to build a smelter outside the eastern province where its mammoth Grasberg mine is located.

The company had signed a memorandum of understanding last week with state-controlled fertilizer company Petrokimia Gresik to rent land to establish a $2 billion raw minerals processing facility near Petrokimia's plant in Gresik.

Freeport had just acquired an extension of a six-month raw mineral export contract from the energy ministry as it set a location of the smelter facility.

In related news, Bambang Susigit, technical and environmental director at the ministry, said the mining inspection team had completed an investigation into an accident in Freeport's mining area that claimed one life.

Construction worker Suardi Ilyas, 27, died on Sunday after being hit by a truck in an underground mine a day earlier.

Bambang did not give further details on the investigation as the team would arrive in Jakarta on Friday night and had not released a formal report yet.

Investor Daily

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