James Moffet Resignation May Affect Smelter Construction

TEMPO.CO, Jakarta - The resignation of James "Jim Bob" Moffet, CEO of Freeport McMoRan Inc. hopefully will not affect the company's plan to construct a copper smelter in Indonesia. PT Petrokimia Gresik, the company that has provided land for the smelter construction, reminded Freeport of their commitment in the project.

Petrokima Gresik CEO Hidayat Nyakman expressed his concern that Jim Bob's resignation may well affect the continuation of the project. "Because the one who made the commitment to build a smelter is [Jim Bob]. He is so familiar with Indonesia," Hidayat said on Tuesday, December 29, 2015.

Hidayat underlined that the construction of a smelter is mandated in Law No. 4/2009 on Mineral and Coal. Therefore, if Freeport fails to construct a smelter by January 2016, the company can no longer export copper.

Petrokimia Gresik has prepared a 70 to 100 hectares of land in the Gresik Regency. Based on a memorandum of understanding signed on January 22, 2015, Freeport had agreed to a 40 year period land-use cooperation scheme. "Around 43 hectares of land is ready to be handed over [to Freeport]," Hidayat said.

Based on a contract extension issued by the government, the smelter should have been operational in 2017. The smelter itself costs US$2 billion with a projected annual production capacity of 2 million tons of copper concentrate.

ARTIKA RACHMI FARMITA