Indovasi plans to build $1.5 billion smelter

PT Indovasi Mineral Indonesia, one of three companies offering to process copper concentrates of PT Freeport Indonesia and PT Newmont Nusa Tenggara, plans to spend up to US$1.5 billion to build a copper smelter, Bisnis Indonesia reported on Wednesday.

Indovasi?s president director Taufik Sastrawinata said that the smelter to be built by the company would have a capacity to process 200,000 tons of copper cathodes. He said that the company had signed a memorandum of understanding with Freeport and Newmont on their commitment to provide copper concentrate supply for the smelter.

?We will sign a sales purchase agreement with Newmont later this month,? he said, adding that the same agreement would be signed with Freeport next month. ?We are optimistic that we will get copper concentrate supply from the two companies,? he added.

Freeport is expected to provide between 70 percent and 80 percent of the copper concentrate requirements, and Newmont would provide between 30 percent and 20 percent.

Taufik said that the company was seeking a 20-year supply contract from the two companies. At present, Indovasi is preparing a feasibility study on the smelting project which is expected to begin next month, and is scheduled for completion between six and eight months . (*)