Freeport Projects Over US$7bn in Annual Contributions to Indonesia

TEMPO.CO, Jakarta - PT Freeport Indonesia expects its annual contribution to state revenues to exceed US$7 billion, or around Rp120 trillion, once mining operations return to full capacity and its copper downstream facilities in Gresik, East Java, are fully operational.

Freeport Indonesia President Director Tony Wenas said the increase would be driven by the operation of the company's new copper smelter and precious metals refinery (PMR) in the Gresik Special Economic Zone, enabling the entire copper value chain to be processed domestically.

"With the operation of the smelter and precious metals refinery in Gresik, the entire copper value chain, from concentrate and copper cathodes to precious metals such as gold and silver, can now be processed domestically. This marks a major leap in Indonesia's mineral downstreaming efforts," Tony said during a hearing with the House of Representatives' Commission XII on Tuesday, July 14, according to a company statement issued on Wednesday.

Gresik Facilities Boost Domestic Processing

The new smelter has an annual processing capacity of 1.7 million tons of copper concentrate.

Combined with PT Smelting Gresik's existing 1 million-ton capacity and a 300,000-ton expansion, Freeport now has a total domestic refining capacity of around 3 million tons of copper concentrate per year.

The precious metals refinery, which can process 6,000 tons of anode slime annually, is capable of refining gold, silver, and platinum group metals.

The facilities are expected to produce around 600,000 tons of copper cathodes each year. Together with PT Smelting's output, Indonesia's total copper cathode production is projected to reach approximately 800,000 tons annually.

The PMR is also expected to produce about 50 tons of gold, 200 tons of silver, 30 kilograms of platinum, 375 kilograms of palladium, 285 tons of selenium, 220 tons of bismuth, and 2,200 tons of lead each year.

All gold produced by the refinery is planned to be purchased by state-owned miner PT Aneka Tambang Tbk (Antam).

Recovery Underway After Operational Disruptions

Tony said the smelter's operations had faced several setbacks in recent years.

A fire at the gas cleaning plant in October 2024 temporarily halted operations, although repairs were completed and the smelter resumed operations in May 2025.

However, operations were disrupted again following a landslide at the Grasberg Block Cave mine, which interrupted concentrate supplies from Papua.

Freeport is currently using the production halt to conduct comprehensive inspections and improvements to the facilities before concentrate shipments from Papua are expected to resume in September this year.

"Our current focus is ensuring that mine recovery efforts proceed safely so that concentrate supplies can return to normal. Once upstream operations recover and the smelter operates at full capacity, the benefits of downstreaming will become increasingly significant through higher metal production, stronger domestic industries, and increased state revenues," Tony said.

According to Tony, mining operations are expected to run at around 65 percent of capacity in 2026 as recovery efforts continue following the landslide.

Production capacity is projected to rise to around 75 percent in the first half of 2027 before returning to full capacity by the end of the year.

State Revenues Expected to Surge

In line with the recovery, Freeport expects metal production to increase gradually.

The company targets copper production of around 800 million pounds and gold output of 700,000 ounces, or approximately 21 tons, in 2026.

Production is projected to increase to 1.2 billion pounds of copper and 1 million ounces of gold, equivalent to around 31 tons, in 2027. By 2028, output is expected to reach 1.6 billion pounds of copper and 1.4 million ounces of gold, or roughly 43 tons.

As production recovers, state revenues from Freeport's operations are expected to rise from around US$2.6 billion in 2026 to US$4.7 billion in 2027, before surpassing US$7 billion annually once production returns to normal levels.

During the hearing, Commission XII praised state mining holding company MIND ID and PT Freeport Indonesia for strengthening Indonesia's copper downstream industry through the development of the Gresik smelter and precious metals refinery, saying the projects would increase mineral value-added, bolster domestic processing industries, and enhance contributions to the national economy.

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