REPUBLIKA.CO.ID, JAKARTA -- The government has extended the license for PT Freeport to export mineral concentrate for six months after the expiration of the current license on January 25.

Director General for Mineral and Coal R Sukhyar said Freeport has picked a place for the smelter it pledged to build to process its copper concentrate.

The government has allowed the US company to continue exporting copper concentrate on condition it is serious in building the smelter.

The government has banned exports of mineral ores forcing producers to build processing facility to process their ores.

"We will soon issue export recommendation," Sukyar said after a meeting with President Director of Freeport Indonesia Maroef Syamsoeddin.

He said Freeport has signed an agreement with PT Petrokimia Gresik to use a 80 hectare plot of land owned by the state company by Freeport in Gresik, East Java.

Freeport will rent the land of Petrokimia for Rp80 billion a year and Freeport will pay US$130,000 for the rent to show it is serious with the plan, he said.

In July 2014, the government licensed Freeport to export 756,300 tons of copper concentrate until January this year on condition it was to build a new smelter in Gresik.

The smelter in Gresik is to be operational in 2017 to be followed with one to be built in Papua to be operational in 2020.

Earlier this week Energy and Mineral Resources Minister Sudirman Said expressed disappointment at Freeport for failing to build the copper smelter according to the agreement.

The company has not even decided where the smelter is to be built, the minister said.

He said he believed the company, which is the largest copper and gold producer in the country, is financially capable of building the smelter.

Sukhyar said Freeport has set aside US$15 billion for investment to expand underground mining and build infrastructure in its mining concession in Papua.

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