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Indonesia’s grand plan to sink world’s richest mine

JAKARTA – When Indonesia’s government took majority control of the legendary Grasberg mine from American mining giant Freeport McMoRan Copper & Gold (FCX) two years ago, visions of an onrushing gravy train obscured the cost realities of operating one of the world’s richest copper and gold complexes in Papua’s mist-shrouded central highlands.

Central to the negotiated takeover from PT Freeport Indonesia (PTFI) was a nationalistic demand that the Phoenix-based company build a US$3 billion smelter, which in theory would allow Indonesia to reap the benefits of more value-added production rather than exporting mere raw materials.

With the Covid-19 pandemic straining the country’s public finances and Freeport now an important part of the state mining stable, signs had emerged in recent months that the government was rethinking its insistence on the expensive facility slated to be based in East Java.