Papuan community members and the local government eagerly await the construction of a smelter in the region to help refine mineral resources such as gold, silver, iron, copper, and other base metals from their ores.
Energy and Mineral Resources Minister Sudirman Said and Public Works and Public Housing Minister Basuki Hadi Mulyono have inked an agreement with PT Freeport Indonesia and other stakeholders to build a smelter in Timika at the earliest, Papua Governor Lukas Enembe announced in Timika on Monday.
"We positively welcome the agreement on the construction of a smelter that has been reached for reaping the benefits of integrated development in the industrial area of Timika," Enembe remarked.
According to him, the construction of a smelter in Timika is part of the governments efforts to boost the nations mineral ore processing capacity as mandated by Law No. 4 of 2009 on Mineral and Coal Mining.
Governor Enembe noted that since several years, the Papuan provincial government has formulated a plan to develop Timika into an industrial estate.
"Now, the task of the local government is to prepare a team to select companies that have the ability and capacity to engage in the construction of an industrial estate in Timika," the governor explained.
According to him, the location for the construction of a smelter in Timika did not pose a problem as the district government has provided the required land.
The government and local community members have urged Freeport Indonesia to build a smelter in Timika, Papua, where the companys giant copper and gold mine is located.
The construction of a smelter in Papua will also boost the refining capacity to absorb the growing concentrate supply resulting from the increase in mining output of Freeport Indonesia.
Energy and Mineral Resources Minister Sudirman Said noted in a statement here on Wednesday that the construction of a smelter in Papua is intended to handle the mining output of PT Freeport Indonesia.
Freeport Indonesia had started its operations in Timika, Papua, under a contract of work signed in 1967.
The company signed a memorandum of understanding (MoU) to renegotiate its work contract as the government tried to amend several terms in the contract in line with the regulations defined under the Mining Law of 2009.
Under the MoU, which highlights Freeport Indonesias principal agreement over amendments to its contract, the company agrees to comply with the law, including the obligation to establish a smelter to process its concentrates.
"Construction of a smelter in Gresik, East Java, is an extension of the existing one, while the one in Papua is intended to refine the mining production of PT Freeport," the minister remarked.
He noted that in future, Indonesia will need a refining capacity of at least four million tons to process raw materials such as gold, silver, and coal.
According to Sudirman, PT Freeport has agreed to build a smelter on a 650-hectare plot of land at the Poumako industrial area in Papua.
He stated that a Chinese investor will build the smelter in Papua, while PT Freeport Indonesia will supply the raw materials.
Therefore, Freeport will be involved in the development of two smelters, one in Gresik and the other in Papua.
Fertilizer, petrochemical, LPG filling, and cement plants will also be set up at the Poumako industrial area where Freeport will build its smelter.
The Papua provincial government is also committed to allocating an initial investment worth Rp2 trillion for the development of the industrial area, which can be expanded up to two thousand hectares.
Furthermore, Mimika District Head Eltinus Omaleng has stated that the land is available for PT Freeport Indonesia to construct a smelting industry with processing and refining facilities for mining products.
"There is no problem with regard to the location where Freeport can build the facility in Timika," Omaleng affirmed in Timika early last week.
He added that Freeport was being urged to build a smelting industry in Timika as Papuans no longer want to live in a state of underdevelopment and poverty.
According to him, Papua would continue to remain in poverty if all the minerals resources extracted from its mines, which have been extensively exploited by Freeport for over four decades, were taken out of the province.
In a bid to fulfill this aspiration, Omaleng affirmed that a 200-hectare plot of land had been earmarked by the Mimika district government for Freeport to build a smelting industry.
On a separate occasion, Governor Lukas Enembe stated that the Timika region is considered the most suitable location for Freeport, which has a global portfolio of mineral assets, to build the smelting industry.
"There is no reason whatsoever for Freeport to not build a smelting industry in Papua. The most suitable location for it would be Timika and nowhere else," Governor Enembe noted in Timika.
PT Freeport, which also operates the countrys largest gold mines in Papua, has been ordered to build the smelting industry in the region to offer economic and social benefits to the local community.