Govt asks Freeport to reduce production

The government has urged PT Freeport Indonesia to reduce its copper and gold ore production if the company is unable to process all of its production at local smelters in 2014 as stated in the mining law, Bisnis Indonesia reported on Monday.

Dede I Suhendar, Director for coal mine development at the Ministry of Energy and Mineral Resources, said last week that Freeport should adjust its production to the capacity of its smelting plant.

?Production should be adjusted to the capacity of its smelting plant in 2014. At present, only about 30 percent of Freeport?s production are processed at a local smelter,? he said.

About 30 percent of Freeport?s copper and gold ores are processed by PT Smelting Gresik at its smelting plant in Gresik, East Java. Freeport, which owns a 25 percent shares in PT Smelting Gresik, should process all the production at local smelters starting 2014 as stated in the 2009 mining law. Beginning 2014, exports of unprocessed mineral ores are also banned.

Dede said Freeport should reduce its production by 70 percent until it is able to increase its smelting capacity in the country.

As reported by Kontan business daily, Dede also said that the government would issue strict measures against miners including Freeport which were unable to meet the 2014 deadline to process all their ore production at local smelters.

?Freeport?s exports should be halted because its smelting capacity is only about 30 percent of its total production,? he added.

At present, Freeport produces 215,000 tons of copper and gold ores per day. (*)