JAKARTA (TheInsiderStories) – Indonesia is in talks with Australia’ Fortescue Metals Group Ltd., and China’ Tsingshan Group to build a new industrial estate for metal smelting in North Kalimantan, said senior economic minister on Tuesday (03/30). The project near to 11,000 megawatts (MW) Kayan river hydroelectric power project owned by state firm, PT Indonesia Asahan Inalum (MIND ID).
For background, in September 2020, the minister, Luhut Binsar Panjaitan, has signed an agreement with Fortescue Future Industries Pty. Ltd., to develop the green energy sector in the country. The miner plans to build a hydro power plant with a capacity of 60 GW and geothermal plant with a capacity of 25 GW throughout Indonesia.
Under the agreement, Fortescue has been granted the right to conduct feasibility studies on hydropower and geothermal projects in Indonesia. The hydropower produces hydrogen is needed by the lithium battery industry, he added.
Fortescue’ chairman Andrew Forrest said, “We expect the new green industries in Indonesia to substantially diversify, broaden and deepen Indonesia’ already skilled workforce.”
MIND ID is planning to build a 900 MW hydropower plant in Kayan River with total cost up to US$2.25 billion. The company is looking to raise a project financing loan and also invite partners in the project. The project is estimating will be commercially operated in 2024.
The electricity produced by the power plant will be used for the aluminium smelter in Mangkupadi – Tanah Kuning Industrial Estate and International Port in North Kalimantan. The state mining holding is also planning to build a 1 million ton per annum aluminum’ smelter in the same areas that will produce not only aluminum but also billet and alloy.
The early investment of the smelter is $2.5 billion with capacity 500.000 million per annum. The smelter is expected to be built in 2022 and will be operated in 2024. The power plant and the smelter will be connected with 125 km transmission line.
Indonesia government has selected Inalum to acquire 51 per cent of shares in gold and copper miner PT Freeport Indonesia in exchange for a contract extension for its mining site in Papua to 2041. The Grasberg mine has 1.187 tones of gold reserves and 19.4 millions of copper. The first gold and copper mine Eastberg was found in 1967 and then Freeport signed the first generation of contract of work.