Freeport Eyes Double-digit Growth in Sales

Big Gossan mining area in Mimika, Papua
Big Gossan mining area in Mimika, Papua (Picture resource://

PT Freeport Indonesia (PTFI), a subsidiary of US-based Freeport McMoRan Copper and Gold, Inc., is aiming for double-digit growth in copper and gold sales this year, the realization of which depends on ongoing talks with the government over an export permit.

Big Gossan mining area in Mimika, Papua
Big Gossan mining area in Mimika, Papua (Picture resource://

According to a report released by Freeport McMoRan late Wednesday, sales of copper from its Indonesian unit were expected to reach 1.1 billion pounds this year, increasing by around 24 percent compared to 885 million pounds in 2013. Meanwhile, gold sales are expected to touch 1.6 million ounces, increasing by around 45 percent from 1.1 million ounces last year.

“Sales from Indonesia are expected to increase in 2014 through 2016 as Freeport Indonesia gains access to higher grade ore. Its estimated sales volume is subject to change depending on the timing of the resolution of export matters,” the report stated.


Freeport Indonesia is still working to get a license to continue exporting its copper concentrate following Indonesia’s banning of raw mineral exports, which has been effective since Jan. 12. The government also plans to control the shipment of concentrate by imposing progressive taxes.

Concentrate exports will be allowed only until 2017, as the government expects all minerals to be refined in domestic smelters after the 2017 deadline.

Freeport opposes the taxation of exports, claiming the tariff conflicts with its contract of work (CoW) to mine in the country.

PT Freeport IndonesiaFreeport Indonesia’s production of copper stood at 915 million pounds in 2013, increasing by 31 percent compared to 695 million pounds in 2012. Meanwhile, gold production reached 1.14 million ounces in 2013, a 32 percent increase compared to 862,000 ounces in 2012.

The company said that the significantly higher production and sales, which was gained in the fourth quarter of 2013, was due to a higher grade of ore as well as increased mill and recovery rates.

Baca juga :   No Need for IPO to Divest Freeport’s Shares: Senior Minister

Freeport added that its underground mine in Grasberg, Papua, had produced 59,900 metric tons of ore per day. This rate is expected to reach 80,000 metric tons of ore per day by the middle of this year.

According to Freeport McMoRan’s financial disclosure, Freeport Indonesia earned a total US$4.4 billion in revenue in 2013, up by around 6 percent compared to $4.15 billion in 2012. The company’s total sales included Freeport Indonesia’s sales to PT Smelting totaling $1.7 billion in 2013 and $2.1 billion in 2012.

Smelting is the only copper smelter in Indonesia. Freeport Indonesia supplies 40 percent of its annual production of copper concentrate to Smelting.

The earnings from the Grasberg mine are currently the biggest contributor among Freeport McMoRan’s mining sites.

Freeport Indonesia’s gross profits stood at $1.53 billion in 2013, a 12 percent increase compared to $1.36 billion in 2012.

Freeport McMoRan estimates aggregate capital spending of an average $900 million per year for Freeport Indonesia’s development of high grade underground ore mining, which is expected to produce approximately 240,000 metric tons of ore per day following the transition from the Grasberg open pit, which is expected in 2017.

Moreover, development is also under way of the Deep Mill Level Zone and Grasberg Block Cave, which are expected to commence production in 2015 and 2017, respectively. (Raras Cahyafitri, The Jakarta Post)


Tulis Opini Anda