PT Freeport Indonesia (PTFI) contributes significantly to the Indonesian economy through state revenues such as taxes, royalties, dividends, as well as indirect economic benefits such as community development. 

In terms of downstreaming, PTFI has also demonstrated it through the construction of a copper smelter in the Java Integrated Industrial and Ports Estate (JIIPE) Special Economic Zone (KEK) Gresik, East Java, which is the largest single line copper refining smelter in the world.

PTFI through the smelter then produces products in the form of copper cathodes to gold and silver bars. The construction of the smelter is also a milestone in the downstreaming of natural resources (SDA).

Prior to this smelter, copper concentrates from Grasberg Block Cave (GBC) in Papua were exported in raw form without going through a refining process that provides added value. But now, with the smelter in JIIPE Gresik, copper concentrates can be processed domestically into copper cathodes, gold, and silver, which are high-value products.

As part of Suar 's efforts to provide a comprehensive overview of the benefits of doing business in SEZs and also how PTFI sees the dynamics of the mining industry in the country and its role in the nation's economy, the SUAR team, namely Sutta Dharmasaputra, Mukhlison, Agung Mahesa, Ahmad Afandi, and Gema Dzikri Harisma, had the opportunity to talk with PTFI President Director Tony Wenas at the PTFI Office, Jakarta, Tuesday (11/11/2025).

How has PT Freeport Indonesia experienced since operating in KEK JIIPE Gresik?

So first of all, of course, this JIIPE industrial area which eventually became a KEK. First, it is an integrated industrial estate , industrial, and ports estate, JIIPE. Java Industrial and Port Estate is something like that.

So indeed the area is complete. There is a port, so we also chose the location there. From several other prospective locations, previously from the Gresik petrochemical industrial area, there was also one in Papua, and JIIPE we compared using a weighted average, so we finally decided there. Because the facilities are very adequate, the port is a quiet port, which can be used throughout the year, and also other integrated facilities. Moreover, then this area was declared a special economic area, under the coordination of the Coordinating Ministry for the Economy.

And of course we as tenants there feel very helped, very helped in addition to several facilities, exemption facilities for importing goods for the development, then bonded zone facilities, and so on which are indeed very helpful. It is very much felt, especially since the Coordinating Ministry for Economic Affairs, which oversees the SEZs, is very active with the SEZ Implementing Agency. So that we really need everything that is very responsive and even proactive to ask about progress and so on what can be helped.

So this is really very helpful for us, in addition to of course other facilities. Especially if the company is a new company, which is just starting to invest, just starting to be established, of course there are even more facilities. Tax holidays and so on can be received.

For us, the company has been around for decades. So this smelter project is integrated into PTFI, which is fifty years old. So in general, the Gresik special economic zone is really the right area for investment, especially in the smelter sector or refining copper, gold and silver, which is what we do.

Because this is also evident after we started investing, it turns out that there are also quite a lot of other derivative industries that want to enter or that have entered the Gresik Special Economic Zone.

Is there collaboration between companies in KEK JIIPE Gresik? Are there other companies that use PTFI products?

Yes, one of them is Hailiang. Hailiang built its factory facility right across from us. It's just a different street. And they will consume copper cathode from us.

This is just one example. Hopefully in the future there will be more companies that need copper cathodes that want to invest there, in the same location because in terms of transportation it is really very easy to just cross. And also other industries.

How is PTFI's commitment to encourage the national economy and downstreaming with the smelter in KEK JIIPE Gresik?

First, let me explain, we have already built one smelter in 97 that is already in operation. The name of the company is PT Smelting where we were a minority shareholder, now we are a majority partner with Japan. And it has been operating for decades, producing.

And now as our commitment in the IUPK (Special Mining Business License) as part of the negotiation with the government where we are required to build one more new smelter . Regardless of whether the new copper smelter is then profitable or not profitable is no longer an issue. Whether the added value is small or large is no longer an issue because it has become a commitment and we have completed it.

Last year we completed it in October even though it caught fire. And then since last May, this year we have started producing copper cathode from the smelter . And of course, the biggest benefit is the availability of copper cathode gold bars and silver bars in the country.

As I said earlier, if for example this copper cathode can then be used directly by manufacturers or manufacturing industries that use copper raw materials, of course it will be very efficient if it can be built in the same area, which is certainly in Indonesia. So that the further added value, from copper ore to copper concentrate is already 95%, from copper concentrate to copper cathode an additional 5% approximately, so the value-added is already 100%, but there are still other added values.

The further added value, if he then becomes a cable, wire rod, or becomes an electric vehicle battery and so on, of course the added value will be even more. More and more. If we talk about downstreaming, it doesn't stop with the copper cathode.

From the downstream mining company, it stops until it produces goods with 99.99% content. We have done that. Now there is a more advanced downstream industry that can then create or produce other forms of goods that use copper or gold or silver cathodes as raw materials.

Which is more profitable? Selling domestically? Or export?

If we sell anywhere, it's the same. Selling domestically or selling abroad is at the London Metal Exchange price.

So if you say this person prefers to export, no, we are the same. But if the domestic market is not there, we need to export. The point is always like that.

If, for example, the product is a coal product that oh, if it is domestically purchased by PLN, the price must be this much. If we export, we can get X plus 20, 30. Yes, people may prefer to export because the price is more expensive. If we don't, the price is the same. 

If it's domestic, it's even easier for us. For example, our gold products, if Antam can take 100%, we are happier. But if there is no domestic market demand, we must still be allowed to export. Yes, but we are now producing materials that are already considered finished materials, which are already downstream products, already through the refining process, which is 99.99% copper, both copper, gold and silver. 

Is the incident at Grasberg hampering production?

From September 8, we stopped all our production. So we focused at that time to find the victims. And after being found, after we evaluated the areas or mines that were not affected, namely the Deep Mill Level Zone mine and Big Gossan, we have resumed operations starting on October 28.

And also the development of the Wild Cat mine we started to continue. But the affected area, namely the Grasberg Block Cave, which is the largest underground mine, is still being stopped, the investigation has been completed, we are evaluating it, and we are doing repairs, of course, repairs, restoration and so on. 

The plan for Grasberg Block Cave is that in March 2026 we will start producing again with of course adjustments in accordance with recommendations from the Ministry of Energy and Mineral Resources, Mine Inspector and Chief Mine Inspector. And then from March 2026 it will ramp up gradually and at the end of 2026 hopefully it can reach 100% of the production capacity at the end of 2026. 

What is the production capacity now due to the incident?

Right now the capacity is only 30%. So these two mines only produce approximately in terms of ore, about 65 thousand tons per day from a capacity of 200 thousand. So that's about 30%. So next year, in 2026, we plan to produce only 57 million tons of ore. 

From usually around 2026 full year yes. Full year can be 57 million tons of ore. So we produce ore then processed into concentrate, sent to the smelter in Gresik. Then there it is refined into cathodes, and gold bars. For gold bars, the plan is that this year we will only produce 17 tons, estimated until the end of the year. 

Next year it will be around 31 tons, the gold, the copper cathode around next year will be around 400 thousand tons.

How much does PTFI contribute to national gold production?

So if our capacity, if the level is in accordance with our calculations, it can produce approximately 50 tons a year. Last year because we just started producing at the end of December in 2024 and ramp up gradually. Last year, especially with this incident, we stopped. This year only 17 tons are planned. So next year the plan is 31 tons and is expected to be completelytaken off by PT Antam.

Has it been off take all this time?

Yes, so far there are some that are still exported. Because there are several things, among others, the level does not reach 99.99 percent.

So that if it is sold domestically, it will be subject to VAT and other factors. But our plan in the future will be 100 percent hopefully to betaken off by PT Antam. 

What challenges has PTFI faced since the transition?

So if you ask about the difficulties, yes, the challenges are, for us, the main challenge is the challenge of nature. Because our mine is at an altitude of 4,000 meters, the underground mine is at a depth of 1,600 meters, the highest rainfall in the world is in our workplace, very steep contours, fog almost every day, rain almost every day. And those are our main challenges, besides of course the technical challenges.

The technical challenge is that our underground mine is the largest underground mine in the world with a rock structure that is also unique, among other things, there are wet materials like what happened 2 months ago. And those are our main challenges. Besides, of course, challenges from the safety side.

There are still threats that make us have to be really extra vigilant to be able to anticipate these challenges. 

But in terms of corporation, in terms of management, yes, we already have government elements in PTFI, 9.36% was owned directly by the government of the Republic of Indonesia at that time.

So the coordination with the government is going very well. Especially with MIND ID. The government through MIND ID already owns 51%. We continue to synergize very well with MIND ID. For the benefit, smoothness, safe and sustainable operations so that they can provide enormous benefits to the nation and state. So if you say the benefits in 2024 alone, the state revenue from us is around 80 trillion rupiah.

That's probably the biggest state revenue from one company in Indonesia. And this year it is estimated that even though there was a landslide that made us stop operating, there is state revenue of around 4.1 billion dollars. Or about almost 70 trillion rupiah. Also significant. 

For 2024, of the 4.7 billion dollars, around 900 million dollars or Rp11.5 trillion was received by the local government. So the amount is very large.

This year, next year's plan, the state revenue plan is roughly around 2.9 billion dollars or 3 billion dollars which is roughly around Rp48 trillion. This is with that we only produced 57 million tons of ore compared to 75 million tons like normal years. 

How does PTFI move to remain a reputable company?

So indeed we carry out our operations before 2018 until after 2018 with the same operational pattern, namely how we carry out production operations safely and sustainably. We focus on safe and sustainable operations. We don't really think about whether the price goes up or down, whether the world supply increases or decreases, whether the demand increases or decreases. We just focus on what we can control, we only focus on what we can control by of course carrying out good mining practices with a level of integrity based on our very high principles of business conduct and also of course by paying attention to the carrying capacity of the environment and the benefits for the community.

So we just focus on that and continue to carry out operations including in terms of our procurement process, our operations, our logistics system that we do continue like that with a supervisory pattern with fences that are very clear and very strict , that's actually the key.

What does PTFI do to maintain a balance between contributions to the national, regional, and also the environment?

So in our operations internally, we have a corporate value called Sincere which is safety, integrity, respect, commitment, excellence, that is our handle internally.

But if you ask then how, there is an attraction between this and this and that and so on, we still stick to what I explained earlier, good mining practices, we pay attention to the carrying capacity of the environment, we pay attention to the benefits for the surrounding community, we fulfill our obligations according to laws and regulations, Even more than it should be by maintaining integrity based on our principle of business conduct , with the governance level that we have implemented which is very high, that's all, yes, if you say tug of war, yes, there is definitely this interest, but everything can be faced, can be explained by sticking to the basic principles of management that I conveyed earlier.

What is PTFI's vision for the next 5 to 10 years?

So we are a mining company, we have a vision not for the next 5 years or 10 years, we have a vision until the end of the mine, so we have a mine plan until 2041. Our end of mine plan is in 2041 because the license expires in 2041 so we have developed a mind plan towards 2041.

What year do we mine in which part, everything is complete even from the start of 2018 since we entered into an agreement with the government, the mind planning isalready up to 2041 and my task is to carry out the mining plan again safely and sustainably by practicing good and correct mining practices good mining practices pay attention to the carrying capacity of the environment involve the community and provide benefits to the surrounding community by upholding the integrity and principles of business conduct that we have. So that is actually the mission, we are not a conglomerate company or like those who have innovations oh we make this new product oh we take another new mine, there is no such thing in PT Freeport Indonesia.

We PT Freeport Indonesia only carry out what is mandated in our IUPK until 2041, if for example the government then grants an extension for us until the end of the mine, which we don't know when, we will make changes in our business plan for the end of the mine, so it is different maybe from some other companies that can have product innovation, then business diversification, and so on, we mining companies do not have such luxury , our vision is to continue mining safely and sustainably.