Senior executives of Indonesia's state-owned mining holding company: negotiations between Freeport Indonesia and Castle Peak Group are still under way

An executive at Indonesia's state-owned mining holding company said talks with China's Qingshan group (Tsingshan Steel) were ongoing over a $2.8 billion plan to build a second copper smelter for (Freeport Indonesia), a free port in Indonesia.

Orias Petrus Moedak, president of Mind ID, said that Indonesia's Freeport would make a final decision within the next two weeks on whether to accept Aoyama's offer or build the smelter on its own. Mind ID has a controlling stake in Indonesia in Freeport McMullen (Freeport- mcmoran), an American mining company.

"Aoyama offers a cheaper solution and works faster," Modak told reporters at an online event on Friday. In terms of cash flow, this makes sense, so we are considering it. He denied recent reports that the failure of the two sides to reach an agreement by the end of March had led to an impasse in the negotiations.

But he also said, "We have to consider the timing, the quality and the final price. We don't want the price to be cheap at first and then become expensive." So we are currently negotiating these terms. "

Copper prices hit record highs as expectations of an economic recovery and forecasts of surging demand from electric carmakers and renewable energy producers pushed copper prices to record highs. Electric car makers and renewable energy producers will need more conductive metals.

Mr Modak said a decision must be made by the end of May to meet the government's deadline to complete the smelter project by December 2023.

He added that if negotiations with Aoyama broke down, Freeport would return to its original plan to build a second smelter in (Java Integrated Industrial and Port Estate), an integrated industrial and port industry in East Java. It is close to an existing smelter in which Indonesia's Freeport (Freeport Indonesia) has a minority stake, with Japan's Mitsubishi Materials holding a controlling stake.

Mordak pointed out that this was the plan before the construction progress was stopped by the coronavirus pandemic and the Castle Peak Group made an initial offer, and engineering design and other preparations were still under way.