PT Freeport Indonesia (PTFI) is ready to build a Gas and Steam Power Plant (PLTGU) with a capacity of 265 megawatts (MW). This green energy plant is planned to replace the coal steam power plant (PLTU) in 2027.
Referring to the Freeport-McMoRan Inc report. (FCX) quarter III/2023 which was released on October 19 2023, the clean energy project will require an investment worth US$ 1 billion or the equivalent of IDR 15.86 trillion.
"We have plans to develop a 265 MW PLTGU to replace the PLTU unit that we developed 25 years ago," said Freeport-McMoRan President Kathleen Quirk in the FCX conference call for the third quarter of 2023, quoted on Sunday (22/10/2023).
He said the PLTGU project would reduce the costs of updating and expanding PLTU units in the next few years. On the other hand, PTFI is also working to increase the power capacity of the Gas Engine Power Plant (PLTMG) to the level of 168 MW, from the initial capacity of 128 MW.
"What's interesting is that this transition will reduce greenhouse gases from PTFI, and together with other initiatives the total emission reduction can reach 60 percent compared to the 2018 baseline," he explained.
In other developments, PTFI together with Freeport-McMoRan Inc. continues to build intensive negotiations with the Indonesian government to obtain an extension of the mining concession contract after the special mining business permit (IUPK) expires in 2041.
Certainty of contract extension beyond the 2041 concession deadline is important for FCX because of the massive investment plans in the currently unexplored underground mine, namely the Wildcat. Apart from that, the company's zero carbon emission investment plan is also included in the calculations until 2060.
Nevertheless, Quirk said, the government is currently focusing on simultaneous General Elections (Elections) next year. He ensured that negotiations would continue amidst the current election concentration.
"Indonesia is currently entering the election stage, so there are many things going on in the government, they have many priorities at the moment to balance," he added.
Meanwhile, the Indonesian government has included increasing share ownership as one of the conditions for extending PTFI's Special Additional Business Permit (IUPK) contract.
"I need to emphasize, the government will increase shares by approximately 10 percent," said Minister of Investment/Head of the Investment Coordinating Board (BKPM) Bahlil Lahadalia in a press conference, last Friday (28/4/2023).
Apart from that, the government will also ask Freeport to build a smelter in Papua, in addition to the construction currently being carried out in Gresik, East Java.
According to Bahlil, Freeport needs 10 to 15 years of exploration time before starting production, which is different from nickel and coal exploration. Therefore, the government is calculating the appropriate extension time given the remaining potential reserves.
"Don't let production decline by 2035, it must continue to increase, especially since Indonesia has 51 percent share ownership in Freeport. "In the future, with negotiations, if you add 10 percent, it will reach 60 percent," he explained.
For your information, the majority share ownership composition of PTFI is currently held by the Indonesian Government at 51.2 percent, the remainder is controlled by Freeport McMoRan (FCX).
The shares owned by the Indonesian government are reflected in the ownership of 26.24 percent of the mining holding of BUMN MIND ID and 25 percent of PT Indonesia Papua Metal and Mineral (IPMM). Currently, PT IPMM shares are 100 percent owned by MIND ID. To transfer shares to BUMD Papua, MIND ID will release 40 percent of its shares in PT IPMM. (AT Network)
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