Indosmelt in talks with Bosowa to develop copper smelter

PT Indosmelt is reviving its plan to develop a US$1.5 billion copper cathode smelter in Maros, South Sulawesi, as the company has been in talks with the Kalla Group, a well-diversified conglomerate owned by the family of Vice President elect Jusuf Kalla.

Kontan quoted Indosmelt President Director Natsiur Mansur as saying Monday that there is possibility for the Kalla Group to have up to a 30 percent stake in the smelter project. ?We have yet to decide on the share composition, but we?ll still maintain majority,? he said.

Indosmelt announced plan earlier this year to build a 120,000-ton per year copper cathode smelter in Maros, which will require the supply of 500,000 tons of copper concentrates per year. The company then signed conditional sales and purchase agreements (CSPA) with PT Freeport Indonesia and PT Newmont Nusa Tenggara, in which the two latter firms will supply copper concentrates for planned smelter.

But Indosmelt suspended in May the project after Freeport decided to build its own smelter in Gresik, East Java.

Natsir is optimistic that the smelter project would be realized once the Kalla Group is on board particularly as the latter is a key supplier of electricity in the Sulawesi region. Electricity supply is seen as one of key factors to help ensure the success of smelter project in Indonesia.

Elsewhere, Natsir said that Indosmelt has also been in talks with the Bosowa Group, another major business group in Sulawesi, to help realize the planned smelter project.

With Freeport?s copper production set to keep increasing starting 2021 with the operation of its underground mine in Papua, the country will need to have more smelters to process the concentrates including the one to be developed by Indosmelt. (*)