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"While a large number of countries around the world continue to talk about securing raw material supply, China is actually doing something about it."
Indonesia’s investment minister said on Monday that authorities should consider allowing Freeport Indonesia to export copper concentrate beyond May as its new smelter will not be able to immediately absorb all of its output.
The resource-rich country banned exports of raw minerals from June last year, but allowed Freeport to continue shipments until the end of May while it finished construction of a $3 billion smelter in East Java with a 1.7 million metric ton processing capacity.
Freeport, however, said that while the smelter is expected to start operations in June, it will not reach full production capacity until around the end of the year, leaving excess concentrate output.
“If there is a potential to grant export permit for the (volume) difference, I think it should be something that we must consider and do,” Investment Minister Bahlil Lahadalia told reporters.
The company is in constant discussion with the government to secure the export permits, a Freeport Indonesia spokesperson said.
The authority to grant permits falls under mining ministry, however it also considers input from other ministries.
The mining ministry declined to immediately comment on the matter.
Freeport Indonesia’s chief executive has previously said that it may have to slash copper ore output by 40% this year if the company is not allowed to export and that state revenue could potentially drop by around $2 billion.
Meanwhile, Indonesia is negotiating to acquire an additional 10% stake in Freeport Indonesia, talks which Bahlil said are “nearing the final stage”.
(By Bernadette Christina Munthe and Fransiska Nangoy; Editing by Kirsten Donovan)
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