Located in North Kalimantan province on Borneo, the estate will span 30,000 hectares (74,132 acres) and include investment from China and the United Arab Emirates, President Joko Widodo said during a ground-breaking ceremony.

"Indonesia's economic transformation starts here where we will manage our natural resources from the upstream to downstream to create massive job availability," Jokowi, as the president is popularly known, said in a broadcast event.

Jokowi is keen to establish manufacturing industries to take advantage of Indonesia's rich natural resources such as nickel, bauxite and copper so that the country can move up the value chain and not just export raw materials.

The government says the estate will be "green" as it will use energy from a planned hydropower project.

Up to $12 billion of investment will be needed for the hydropower project alone and nearly $1 billion for a port, senior minister Luhut Pandjaitan said at the same event.

Luhut said Indonesia also planned for an electric vehicle battery plant to be built at the North Kalimantan project.

The project is being led by PT Kalimantan Industrial Park Indonesia (KIPI), which controls the land to be used for the estate, Luhut said. KIPI is led by coal tycoon Garibaldi Thohir.

Earlier this year, Luhut said Australia's Fortescue Metals Group and China's Tsingshan Holding Group could invest billions of dollars at the industrial park.

(Reporting by Fransiska Nangoy; Editing by Ed Davies)