Fortescue Metals Group could partner with China-based Tsingshan Holding Group to build an industrial estate for metal smelting on Borneo Island in Indonesia with billions of dollars in investment, said a minister in the country.
The metal smelting facility is being planned to come up near a hydropower plant, said the Indonesian Minister of Maritime and Investment Affairs Luhut Pandjaitan.
According to the minister, the smelting operations of iron, nickel, and copper ores at the estate could begin as early as 2023.
Fortescue Metals is likely to invest $12bn, while its Chinese partner could possibly put in $30bn, reported Reuters, citing a slide shown by the minister during a presentation.
Luhut Pandjaitan said: “Total investment, there will be $100bn, including the dam, and it will be completed in 10 years.
The minister said that the companies are planning to break ground on the metal smelting project in October 2021.
The metal smelting estate will be built near the 11GW Kayan hydropower project in North Kalimantan province.
In September 2020, Fortescue Metals’ subsidiary – Fortescue Future Industries had inked an agreement to carry out feasibility studies for utilising the hydropower and geothermal resources of Indonesia to support green industrial operations, mainly for export to global markets.
Earlier this year, the company had revised the cost estimate of its Iron Bridge project in Western Australia to $3.3bn-$3.5bn, owing to an increase in the cost estimate on inflation, foreign currency exchange rates, as well as labour constraints. The Australian iron ore company expects to achieve its first production from the magnetite project in the Pilbara region by December 2022.
