Miner Freeport Plans to Build Papua’s First Cement Plant, Minister Says PDF Afdrukken

Giant copper and gold miner PT Freeport Indonesia has plans to build Papua’s first cement plant next year, which could see the price of the expensive raw material drop dramatically in the remote province.

“The new factory would be built as part of the company’s corporate social responsibility program to support infrastructure development in Papua,” Industry Minister MS Hidayat said on Monday. Half of the factory’s expected annual production capacity of five million tons would be sold on the local market, and Freeport would use the remainder, Hidayat said.

The $150 million factory would be built near the city of Timika, the minister said, without mentioning a targeted completion date.

All cement in Papua is now imported from other provinces, with 50-kilogram sacks selling for Rp 800,000 to Rp 1 million ($85 to $106) each, compared to Rp 50,000 per 50-kg sack in Jakarta.

“So hopefully Papua would be able to fulfill its local construction demands with the new cement factory,” Hidayat said.

He said he would recommend that the project receive tax incentives for 10 years.

When contacted by the Jakarta Globe, Freeport spokesman Mindau Pangaribuan said the planned project resulted from discussions between the company and the Papua provincial government.

Mindau said the feasibility of the project and the eventual retail price of the cement were still being studied. Freeport’s mine tailings would be used to make the cement, he added.

Urip Trimuryono, the chairman of the Indonesian Cement Association (ASI), said the new factory could reduce prices of cement by up to 50 percent in the province.

He said, however, Papua’s remoteness and lack of good roads meant cement prices would remain higher there than in other parts of Indonesia.