Freeport signs land lease deal with Petrokimia Gresik

Gold and copper giant PT Freeport Indonesia has finally signed an agreement with fertilizer firm PT Petrokimia Gresik to lease a plot of plant in Gresik, East Java, from the latter as the location for a planned smelter, Kontan reported on Thursday.

PT Freeport spokeswoman Daisy Primayanti was quoted by the paper as saying that the 20-year land lease agreement was signed last week. She said that Freeport will lease 80 hectares of land belonging to Petrokimia in a transaction worth US$150 million.

With the agreement, PT Freeport can claim that it has made significant progress in developing the required domestic smelter, a condition set by the government in order for the company to obtain extension of permit to export copper concentrates. The current six-month permit set to expire July 25.

Freeport is teaming up with Mitsubishi Corporation to build a smelter with a capacity of 2 million tons of concentrates per year, and estimated investment of $2.3 billion. (*)