Indonesia says Fortescue, China’s Tsingshan in talks for Borneo investment

Indonesia is in talks with Chinas Tsingshan Holding Group and Australias Fortescue Metals Group to build a new industrial estate for metal smelting near a planned hydropower plant on Borneo island, a minister said on Tuesday.

The new estate will be located near the 11,000 megawatt Kayan hydropower project in North Kalimantan province, according to Luhut Pandjaitan, Indonesias coordinating minister for maritime affairs and investment, who also oversees mining regulations.

Were discussing already with Fortescue from Australia and Tsingshan from China to build an industrial estate over there, Luhut told a forum of policymakers, businesses and economists, referring to North Kalimantan.

So then by 2023, this area, this integrated industry is starting to (do) smelting … for iron ore, nickel ore and copper, he said.

He added this development should go in parallel with Indonesias project to produce lithium batteries using its nickel reserves.

Tsingshan, Chinas stainless steel giant, is also a major player in the Southeast Asian countrys nickel downstreaming ambitions.

In September, a Fortescues subsidiary, Fortescue Future Industries (FFI), signed an agreement with Indonesias government to conduct feasibility studies into the utilization of the countrys hydropower and geothermal resources for industrial operations, for potential domestic supply and exports, FFIs chief executive Julie Shuttleworth said in an email.

Construction of the Kayan power plant, which is being developed by Power Construction Corp of China (PowerChina) and Indonesias Kayan Hydro Energy, should begin this year with completion of the first phase projected by 2025, according to local media reports.

Luhut said Indonesias next aim is to produce hydrogen fuel at the Kayan plant.