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Australian iron ore Fortescue Metals Group eyeing geothermal investment in Indonesia

Autonomous drill at Christmas Creek mining project, Australia(source: Fortescue Metals Group Ltd)
Alexander Richter 6 Sep 2020

The Indonesian government and Australian Fortescue Metals Group, the fourth largest iron ore producer in the world, have signed an agreement on cooperation to develop geothermal and hydropower resources in Australia.

Australia, through the CEO of Fortescue Metals Group (FMG) Andrew Forrest, is eyeing the development of Indonesia’s geothermal environmentally friendly energy of 25 GW. FMG is an Australian iron and nickel mining company that is among the top 10 in the world.

To open the plan, Andrew Forrest met President Joko Widodo September 3, 2020. During the meeting, the President immediately assigned the Coordinating Minister for Maritime Affairs and Investment (Marvest) Luhut Binsar Panjaitan.

The next day, September 4, 2020, Coordinating Minister for Marvest, Luhut Binsar Pandjaitan, Indonesia’s Coordinating Minister for Maritime Affairs and Investment, and Andrew Forrest, founder of Fortescue Metals Group (FMG, signed a Deed of Agreement on Green Industry at the Kemenkomarvest, Jakarta.

In the agreement, FMG will invest in the green industry sector by developing a geothermal power plant (PLTP). Apart from geothermal, FMG will also develop a hydroelectric power plant (PLTA). [Note the original news piece reports a 25 GW geothermal plant and a 60 GW hydro power plant, both are rather unrealistic numbers with the current overall installed geothermal power generation capacity in Indonesia of around 2,130 MW and total potential of around 29,000 MW or 29 GW]

“Investments in power plants, excluding additional infrastructure, will cost around tens of billions of dollars,” said Luhut after the signing.

Luhut stated that the huge investment would have a positive impact on Indonesia. To make this happen, both parties will form a task force consisting of representatives from the government and FMG to ensure the investment is carried out as quickly as possible.

Australia’s interest in Indonesia’s geothermal energy has actually been sparked since 10 years ago. In 2011, Australia’s Minister of Energy and Tourism, Martin Ferguson met with Vice President Boediono. Martin expressed Australia’s interest in investing in and developing geothermal in Indonesia.

Various Australian players, among them Panax Geothermal and Origin have been working on development of geothermal resources in Indonesia. Around ten years ago, Panax Geothermal Limited, was eyeing two Indonesian geothermal fields, namely Sokoria on Flores Island and Dairi Prima in North Sumatra. Australian power utility Origin had a joint venture with Indian Tata Power for geothermal development at Sorik Marapi. Both though were never realised by these Australian players and subsequently sold.

Both of these projects were taken over by KS Orka and the Sorik Marapi geothermal power plant has started

Andrew Forrest himself was named the third richest person in Australia is the founder and former CEO of Fortescue Metals Group.

In similar news, it has been reported that Andrew Forrest for Forgescue Metals has had discussions and meetings on potential hydro and geothermal development in Papua New Guinea as well.

In June 2020, Fortescue Metals Group announced its zero emissions target for 2040, eyeing more renewable energy use for its operations. In Australia the company is planning to run one of its mines on solar alone during the day and battery over night.

Source: Panas Bumi