Indonesian policies to force miners to process raw materials at home are misfiring, as disputes over the new rules disrupt plans to invest nearly $4 billion in copper smelters to cater for miners such as Freeport-McMoRan Copper & Gold.
President Susilo Bambang Yudhoyono imposed a controversial mining law on Jan 12, but the rules have left the mining sector in turmoil. As well as a ban on unprocessed ore shipments, a last-minute export tax on concentrates was also brought in.
Below are details on three planned Indonesian copper smelters:
Cost: $1.5 billion
Location: South Sulawesi
Capacity: 700,000 tonnes
Construction period: three years, or in 2017-2018
Has conditional sales purchase agreement with Freeport and Newmont. Indosmelt expects Freeport to supply about 70 percent of concentrate supplies, with Newmont contributing the remaining 30 per cent.
Planning an initial public offering by the end of 2015.
PT Nusantara Smelting Corp
Cost: $1.2 billion
Location: Gresik in East Java
Capacity: 850,000-950,000 tonnes
Construction period: four and a half years
Has conditional sales purchase agreement with Freeport, and Newmont, with Newmont to supply 50,000 tonnes. No volume agreement in place with Freeport.
Backed by an international trading company.
PT Indovasi Mineral
Cost: $1.1-$1.2 billion
Location: Gresik or Tuban
Capacity: 800,000-1 million tonnes
Construction period: three years, or in 2017
Has MoU with Freeport and Newmont. Newmont to supply 10-20 percent of concentrates, Freeport to supply 80-90 percent of concentrates.
Backed by an unnamed Indonesian tycoon.
(Compiled by Michael Taylor, Wilda Asmarini and Yayat Supriatna; Editing by Ed Davies)