JAKARTA, RAKYAT NEWS – The Ministry of Energy and Mineral Resources (ESDM) is set to issue a relaxation export permit for PT Freeport Indonesia (PTFI) regarding copper concentrate exports. This decision will come in the form of a revision to the existing ministerial regulation.

Dadan Kusdiana, the Secretary-General of ESDM, confirmed that the new regulation is currently in the harmonization process and is awaiting approval from the Ministry of Law. “We are finalizing the regulation; it’s currently in line with the Ministry of Law,” Kusdiana stated in an interview at the Ministry on February 28, 2025.

The purpose of the regulatory revision is to allow Freeport to resume its copper concentrate exports, which had been halted following a significant fire at its smelting facility in Gresik, East Java, in October 2024. The fire severely damaged the facility, which is vital for the company’s operations.

The smelter is expected to restart its operations by the end of June 2025, with production gradually ramping up to full capacity by the end of the year. The permit is expected to be valid until June 2025, contingent on the completion of repairs to the smelter.

Minister of Energy and Mineral Resources, Bahlil Lahadalia, explained that the revision of the regulation stems from the classification of the fire as an “extraordinary event” or keadaan kahar. The government reviewed reports from insurance companies and police, concluding that the fire qualifies as such an event, thus justifying the relaxation of export restrictions. “Based on these assessments, the government decided to extend the export period for Freeport until the smelter is fully operational, which should be by June,” Bahlil said.

To formalize the extension, Bahlil requested Freeport’s President Director, Tony Wenas, to sign an affidavit under oath. This statement will affirm that, should the smelter not be operational by June 2025, Freeport will face penalties, including the imposition of a maximum tax on its exports.

Although the exact tax rate has not been disclosed, Bahlil assured that the government would impose the highest possible tax to enforce compliance.

Currently, the exact volume of copper concentrate Freeport is permitted to export has yet to be determined. Bahlil mentioned that the total volume will be calculated based on the available copper concentrate at Freeport’s facilities. This approach ensures that the relaxation aligns with the actual available stock while balancing the company’s operational recovery.

This regulatory adjustment is part of a broader effort by the government to manage the impact of the fire at Freeport’s smelter, which has had significant financial implications. According to Freeport’s leadership, the fire has caused an estimated revenue shortfall of approximately Rp 65 trillion. The relaxation of export restrictions is seen as a necessary measure to mitigate some of the financial losses caused by the incident and ensure that Freeport’s operations can recover effectively.

In the meantime, Freeport has been working diligently to repair and rebuild the damaged smelter. The company has committed to restoring the facility’s operations to full capacity by the end of 2025, ensuring that its copper production is not severely affected in the long term. However, the relaxation permit offers crucial short-term relief, enabling the company to continue its copper exports while addressing the infrastructure challenges posed by the fire.

As the situation unfolds, the government’s response to the Freeport smelter fire and the revision of the export regulations will be closely watched by industry stakeholders. The outcome could influence not only Freeport’s operations but also the broader copper export market in Indonesia, which is a key component of the country’s economy. (Uki Ruknuddin)