Freeport’s New Gold Refinery in Gresik Set to Deliver $5 Billion in Annual State Revenue

JAKARTA, investortrust.id — Indonesia’s largest gold refinery, operated by mining giant PT Freeport Indonesia in Gresik, East Java, is projected to produce between 50 to 60 tons of gold annually and generate state revenue of approximately Rp 80 trillion, or around $5 billion. The facility, dubbed the "Gold Factory," was officially inaugurated by President Prabowo Subianto on Monday, March 17, 2025.

The Gresik facility is expected to become a major contributor to national income, with revenue derived from dividends, royalties, export duties, and profit-sharing arrangements as stipulated by Indonesian law. President Prabowo emphasized the refinery’s strategic value during its inauguration, noting the scale of its contribution to the country’s economy from just one commodity.

“This Rp 80 trillion in revenue from the gold smelter is the result of dividends, royalties, export taxes, and profit-sharing in accordance with our laws. What President Prabowo said at the inauguration is accurate—Freeport’s contribution to the country is truly significant,” said PT Freeport Indonesia President Director Tony Wenas on Saturday, March 22.

Production Forecast Adjusted Amid Lower Ore Grades

For 2025, Freeport Indonesia targets gold production of 1.6 million ounces, or roughly 45 tons—lower than last year’s output. According to Wenas, this drop reflects a temporary decrease in ore grade.

Despite the projected decline in volume, Wenas remains optimistic that the company’s revenue will rise, buoyed by soaring global gold prices. “This year, gold prices have reached a record high of $3,000 per ounce,” he said.

In comparison, the highest gold price in 2024 peaked at $2,720 per ounce in October. “Given that we are now seeing gold at $3,000 per ounce—the highest ever recorded—we are hopeful that revenue will at least match last year’s level,” he added.

Rising Commodity Prices May Boost National Contribution

Freeport’s optimism is further supported by the parallel surge in copper prices, another key commodity produced by the company. Copper has reached around $11,000 per metric ton—among the highest levels in recent years.

“Copper prices today are nearing $5 per pound, which is about $11,000 per ton. That’s also a historical high,” Wenas said. With both gold and copper prices on the rise, Freeport expects to maintain, if not exceed, its fiscal contribution to Indonesia in 2025.

A Name Change to “Gold Factory”

Wenas also shared behind-the-scenes details of how the facility came to be inaugurated by President Prabowo. The plant’s construction had initially been launched by former President Joko Widodo in September 2024.

Wenas recounted asking President Prabowo about plans for the inauguration. At first, Prabowo thought the facility might still be under repair due to earlier news of a fire.

“Everything happened quickly. On that Sunday at 11 a.m., I spoke with the Cabinet Secretary. Then, around 2 p.m., the Minister of Energy and Mineral Resources called and said the President was ready to visit,” Wenas recalled.

Originally planned to be called the “Precious Metal Refinery,” the facility was renamed just 15 minutes before Prabowo’s arrival.

“We were asked to change it to ‘Gold Factory’ to make it more easily understood by the public,” he said.