JAKARTA - Australia's Fortescue Metals Group and China's Tsingshan Holding Group could invest billions of dollars to build an industrial estate for metal smelting near a planned hydropower plant on Borneo island, an Indonesian minister said.

The companies have been in talks since early this year about the project and minister of maritime affairs and investment, Luhut Pandjaitan, has said smelting of iron, nickel and copper ores at the estate could start as early as 2023.

Fortescue could invest $12 billion, while Tsingshan has the "potential" to pump in $30-billion, a slide displayed by Luhut during a presentation on Tuesday showed.

"Total investment, there will be $100-billion, including the dam, and it will be completed in 10 years," the minister said, adding that groundbreaking was planned for October.

Fortescue and Tsingshan did not immediately respond to requests for comment.

Last September, a Fortescue subsidiary, Fortescue Future Industries (FFI), signed an agreement to conduct feasibility studies into the utilisation of Indonesia's hydropower and geothermal resources for industrial operations, for potential domestic supply and exports, FFI's chief executive Julie Shuttleworth said in email in March.

FFI has been announcing ambitious global green energy plans, mostly via green hydrogen. It plans to fund the majority of its projects off its balance sheet, investing about $1-billion a year of its own money.

Tsingshan already has large investments in Indonesia ranging from industrial parks to stainless steel processing.

Top nickel producer Indonesia has ambitious plans to start processing its rich supplies of nickel laterite ore used in lithium batteries and eventually become a global hub for producing and exporting electric vehicles (EV).

Miners and EV companies alike are keen to ensure that the supply chains of their batteries are green compliant, and are hesitant to invest in projects powered by coal, which nickel smelters usually rely on in Indonesia.

The new metal smelting estate will be located near the 11 000 MW Kayan hydropower project in North Kalimantan province, on Indonesia's side of Borneo island.