Freeport Evaluates Amman Concentrate Purchase Following Minister's Nudge

Gresik, Indonesia – The operational gears of Indonesia's copper industry may be set for an unusual interlock as PT Freeport Indonesia (PTFI) considers an unconventional source of raw material. Prompted by a suggestion from Energy Minister Bahlil Lahadalia, Freeport is engaged in initial evaluations to purchase copper concentrate from its domestic counterpart, PT Amman Mineral Nusa Tenggara (AMNT). This exploration comes as Freeport's primary source, the Grasberg Block Cave (GBC) mine, remains closed after a landslide, starving its Gresik smelter of feedstock.

The supply gap at Freeport is substantial. The GBC incident in early September 2025 halted operations at the mine, which is responsible for approximately 70% of Freeport's total production. This has had a direct and severe impact on the company's downstream operations. Tony Wenas, President Director of Freeport Indonesia, explained that the incident forced the stoppage of the new Manyar smelter in Gresik, which was previously processing concentrate into precious metals. The company's current smelting activity is now solely reliant on its other facility, PT Smelting.

Minister Bahlil's role was to initiate contact between the two companies. He conveyed that he directly requested Freeport's Tony Wenas to engage with Amman Mineral on a business-to-business basis. "I asked for Amman and Freeport to communicate B2B so their material can be purchased by Freeport to be processed at Freeport's smelter... the government is only a regulator," Bahlil reiterated, distancing the state from the commercial details. This clear delineation aims to allow market principles to guide any potential agreement.

On the supply side, Amman Mineral has the product but not the processing capacity. The company's smelter has been under force majeure since a fire in July 2025. In response, the government issued AMNT a six-month export license for hundreds of thousands of tons of copper concentrate, valid until approximately April 2026. This permit provides Amman with a legal avenue to sell its stockpile, with a domestic sale to Freeport being one of several possible destinations.

Freeport's management has adopted a cautious, evaluative stance. Wenas confirmed that early conversations with Amman have occurred but stressed that the company is still in an assessment phase. "We have had initial talks with Amman regarding the purchase of copper concentrate, but there has been no follow-up. Everything is still in the discussion stage," he stated. The company's paramount focus remains on the safe recovery and investigation at the GBC mine, with a target for partial restart by the first quarter of 2026.

The potential deal is not without its complexities. Beyond price, which would be tied to international benchmarks, logistical considerations of shipping concentrate from Amman's site in West Sumbawa to Freeport's smelter in East Java would factor into the cost equation. Furthermore, the metallurgical compatibility of Amman's concentrate with Freeport's smelter design would require technical review.

This situation underscores the interconnectedness and fragility of global commodity supply chains. A single geological incident in Papua has ripple effects that extend to smelter operations in Java and create unexpected opportunities for another miner in Sumbawa. The government's intervention demonstrates a strategic interest in stabilizing a key export sector.

As the evaluation continues, the industry watches to see if these two major players can forge a short-term partnership. A successful agreement would provide a textbook example of industrial adaptation, ensuring that Indonesia's significant investment in smelting infrastructure continues to yield value even in the face of unforeseen production shocks.

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Tag: Amman Mineral Copper B2B Negotiation Freeport Indonesia Supply Chain Mining Industry Indonesia Smelter Feedstock