Indonesia in talks with Fortescue and Tsingshan to build industrial estate on Borneo Island

Indonesian minister Luhut Pandjaitan announced on Tuesday that the country is currently in talks with Australia’s Fortescue Metals Group and Tsingshan Group of China to build an industrial estate at the Borneo island.

Proposed estate adjacent to a hydropower plant

The Southeast Asian country’s minister for maritime affairs and investment, who also oversees mining regulations, said that the new industrial estate for metal smelting would be located near the 11,000-megawatt Kayan hydropower project in North Kalimantan province of the island of Borneo.

Pandjaitan added that this development would be done in parallel with Indonesia’s project to produce lithium batteries using its nickel reserves.

Comments from the minister

Referring to North Kalimantan, Luhut Pandjaitan said to a forum of policymakers, businesses, and economists: “We’re discussing already with Fortescue from Australia and Tsingshan from China to build industrial estate over there. So then by 2023, this area, this integrated industry is starting to (do) smelting … for iron ore, nickel ore and copper.”

Indonesia’s partnerships with China and Australia

Indonesia already has partnerships with Chinese and Australian companies. The Kayan power plant is being developed by Indonesia’s Kayan Hydro Energy in partnership with Power Construction Corp of China, while Chinese stainless-steel giant, Tsingshan is a major player in Indonesia’s nickel downstreaming ambitions.

Australia’s Fortescue had announced in September that its subsidiary had inked an agreement with Indonesia’s government for conducting feasibility studies. These feasibility studies were aimed at the utilisation of Indonesia’s hydropower and geothermal resources to support green industrial operations.

Kayan Phase 1 by 2025

As per local media reports, the construction of the Kayan power plant is expected to commence this year and the first phase is projected to be completed by 2025. Luhut noted that Indonesia’s next aim is to produce hydrogen fuel at the Kayan plant.

Written By Jonathan Norris
Jonathan is a founder of and has been covering the resources industry since 2018. With over 17 years experience in print, broadcast and online media, Jonathan has seen first hand the transformative effect of online niche media.