Indosmelt?s smelter project delayed
Wednesday, May 28 2014 - 01:16 AM WIB
The paper quoted Indosmelt President Director Natsir Mansyur as saying that uncertainty in the supply of the raw material has caused difficulties for the company to obtain credit from banks to finance the planned US$1.5 billion smelter.
?The construction of our copper cathode smelter has been delayed for an indefinite period of time,? Natsir said, adding that the company as a result has been forced to cancel contract with a number of services companies and contractors.
Indosmelt plans to build a 120,000-ton per year copper cathode smelter in Maros, South Sulawesi, which will require the supply of 500,000 tons of copper concentrates per year. The company earlier this year signed conditional sales and purchase agreements (CSPA) with Freeport and Newmont, in which the two latter firms will supply copper concentrates for planned smelter.
But Freeport, facing pressure from the government determined to see domestic smelters to be ready by 2017, later decides to build its own smelter in Gresik, East Java, as part of requirements to be able to get export recommendation letter from the Ministry of Energy and Mineral Resources. Newmont has also decided to allocate part of its output to the Freeport?s planned smelter, which will require a total of 1.6 million tons of copper concentrates supply per year. The ministry is expected to issue export recommendation letters for Freeport and Newmont this week.
Meanwhile, PT Freeport Indonesia President Director Rozik B. Soetjipto was quoted by Bisnis Indonesia as saying that his company will honor the CSPA, but added that the agreement does not stipulate the volume of concentrates that must be supplied by the company to Indosmelt. (*)