Freeport-McMoRan and Tsingshan Holding Group are ready to sign their previously announced agreement to build a copper smelter in Weda Bay, Indonesia, local press reports quoted Indonesian government coordinating minister for maritime and investment affairs Luhut Pandjaitan as confirming.

The planned copper smelter will cost US$2.8 billion, and the involvement of Tsingshan is expected to bring in Chinese bank debt.

The Weda Bay industrial park is in the province of North Maluku. Tsingshan Holding Group is the world’s largest stainless steel producer, and is already involved in nickel production in Weda Bay, where nickel mining operations started in 2019. The project was given a national strategic project status in 2020.

Indonesia has a large nickel mining sector, and has ambitious plans for large scale production of lithium batteries needed for electric cars. The copper smelter will also produce copper wiring and piping.

In recent years Indonesia has made moves to exert more control over foreign mining companies, and PT Freeport Indonesia is now held 51% by the Indonesian government.

Listed on the New York Stock Exchange, Freeport-McMoRan (FCX) is a global mining company with headquarters in Phoenix, Arizona.

The copper smelter project is part of Freeport-McMoRan's overall arrangement with the Indonesian government, under which it also will keep its mining rights at the Grasberg mine until 2041.

Through its subsidiary, PT-FI, FCX mines one of the world’s largest copper and gold deposits in the Grasberg minerals district in Papua, Indonesia. Aside from copper and gold, PT-FI also produces silver. FCX has a 48.76% interest in PT-FI and manages its mining operations.

In the fourth quarter of 2019, PT-FI completed mining the final phase of the Grasberg open pit and has since been ramping up production of large-scale quantities of copper and gold from its significant underground ore bodies.

From 1990 to 2019, the Grasberg minerals district produced an aggregate of 33 billion pounds of copper and 53 million ounces of gold, including over 27 billion pounds of copper and 46 million ounces of gold from the Grasberg open pit.