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

Freeport Indonesia Anticipates Record US$7 Billion in Annual State Contributions

Tempatdonasi.com – PT Freeport Indonesia is projecting that its yearly financial contributions to the Indonesian government will surpass US$7 billion, equivalent to approximately Rp120 trillion, once mining activities resume normal levels and the company’s copper processing facilities in Gresik, East Java, reach full operational capability. This significant increase in revenue generation stems from the integration of new downstream infrastructure that enables comprehensive domestic processing of copper products.

Strategic Expansion of Downstream Capabilities

Tony Wenas, serving as the President Director of Freeport Indonesia, explained that the anticipated growth in state contributions will primarily result from the newly commissioned copper smelter and precious metals refinery located within the Gresik Special Economic Zone. These facilities allow the complete copper value chain to be processed entirely within Indonesian territory.

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.

These remarks were delivered during a session with the House of Representatives’ Commission XII on Tuesday, July 14, as documented in a corporate statement released on Wednesday.

Production Capacity and Output Projections

The newly constructed smelter possesses an annual processing capability of 1.7 million tons of copper concentrate. When combined with PT Smelting Gresik’s existing infrastructure, which includes a 1 million-ton capacity alongside a 300,000-ton expansion, Freeport now commands a total domestic refining capacity approaching 3 million tons of copper concentrate annually.

The precious metals refinery component can handle 6,000 tons of anode slime each year, enabling the extraction and refinement of gold, silver, and platinum group metals. These combined facilities are anticipated to generate approximately 600,000 tons of copper cathodes annually. When integrated with PT Smelting’s production, Indonesia’s overall copper cathode output is estimated to reach around 800,000 tons per year.

Additionally, the PMR is projected to yield roughly 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 on an annual basis. All gold manufactured by the refinery will be acquired by state-owned mining enterprise PT Aneka Tambang Tbk, commonly known as Antam.

Operational Recovery Following Disruptions

Tony Wenas noted that the smelter’s operations encountered multiple challenges over recent years. A fire incident at the gas cleaning plant in October 2024 caused temporary operational suspension, with repairs completed and full operations resuming in May 2025. Subsequently, a landslide at the Grasberg Block Cave mine disrupted concentrate supplies originating from Papua.

Freeport is utilizing this production interruption period to perform thorough inspections and implement facility improvements. Concentrate shipments from Papua are anticipated to restart in September of 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.

According to Tony, mining operations are forecasted to operate at approximately 65 percent capacity throughout 2026 as recovery initiatives continue. Production capacity is expected to climb to around 75 percent during the first half of 2027 before achieving full capacity by year-end.

Revenue Growth Trajectory

Aligned with operational recovery, Freeport anticipates gradual increases in metal production volumes. The company has set targets for copper production at approximately 800 million pounds and gold output at 700,000 ounces, or roughly 21 tons, for 2026.

Production is projected to escalate to 1.2 billion pounds of copper and 1 million ounces of gold, equivalent to approximately 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 approximately 43 tons.

As production normalizes, state revenues from Freeport’s activities are anticipated to grow from around US$2.6 billion in 2026 to US$4.7 billion in 2027, eventually exceeding US$7 billion annually once production returns to standard levels.

During the parliamentary hearing, Commission XII commended both state mining holding company MIND ID and PT Freeport Indonesia for reinforcing Indonesia’s copper downstream sector through the Gresik smelter and precious metals refinery development. The commission emphasized that these projects would elevate mineral value-added, strengthen domestic processing industries, and enhance contributions to the national economy.