Mitsubishi Materials, Copper Smelter Subsidiary in Indonesia, completed construction work to expand capacity

2024-01-15

Jan. 12, 2024 - Mitsubishi Materials announced the completion of the construction work to expand the copper concentrate processing capacity of Gresik Smelter & Refinery (in East Java, Indonesia), which is owned by their consolidated subsidiary PT Smelting (PTS). PTS will start increasing production from the beginning of 2024. With the completion of the expansion work, the annual copper concentrate processing volume of PTS will increase from 1 million tons to 1.3 million tons, and its annual production capacity of electrolytic copper will expand from the current 300,000 tons to 342,000 tons.

A ceremony was held to celebrate the completion of the expansion work, and the ceremony was attended by Indonesian President Joko Widodo, Mitsubishi Materials President Naoki Ono and also Richard Adkerson, the CEO of Freeport-McMoRan (FCX), which is the US partner company of PTS.

Gresik Smelter & Refinery is a copper smelter that has adopted the use of Mitsubishi Materials’ patented continuous smelting process called the ‘Mitsubishi Continuous Copper Smelting Process’. PTS is Indonesia’s first copper smelting project, and Mitsubishi Materials has participated in this project from the 1990s. A representative of Mitsubishi Materials stated that PTS plays an important role in Indonesia’s copper supply chain, and even after PTS increases production from the beginning of 2024, Mitsubishi Materials will continue to support the operations of PTS.

The construction work to expand Gresik Smelter & Refinery’s capacity cost 250 million US dollars. PTS received a loan that covers the entire costs of the expansion work from PT Freeport Indonesia (PTFI, the Indonesian subsidiary of FCX), which has jointly invested in PTS together with Mitsubishi Materials. The loan will be converted into new stock of PTS based on the book value method (effectively a capital increase) under the conditions that the construction work is completed. After the capital increase, PTS will become an equity affiliate of Mitsubishi Materials.