"Chinese nickel processors face troubles in Indonesia" 27 February 2025

Operational challenges, protests, and nickel prices drop have disrupted production at multiple Chinese-run nickel processing plants. These, together with global uncertainties and a constricting global regulatory landscape, overshadow the sector’s growth prospect and affect the livelihood of thousands of those working in nickel plants.  Below are some recent developments at select Chinese plants.

PT IMIP

As Ramadan approaches, organized and spontaneous protests erupted in different parts of Indonesia. At Indonesia Morowali Industrial Park (IMIP), Indonesia’s largest nickel processing industrial park located in Morowali Regency, Central Sulawesi, trade unions and civil society groups have staged multiple protests and rallies throughout February. Some of these events are detailed below.

On February 18, the Morowali Mining and Energy Industry Workers Union (SBIPE) staged a demonstration in front of the PT. IMIP office, demanding that the plant take responsibility for three workplace accidents in February 2024, which led to multiple worker fatalities and cases of permanent disability.

The Union demanded the plant to compensate the victims of recent incidents and improve workplace health and safety training, and ensure proper provision of Personal Protective Equipment (PPE). However, the demonstration was met with repression. According to local sources, the plant’s security forces used violence against protesters, including trampling an unidentified female worker.

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PT GNI

PT Gunbuster Nickel Industry (PT GNI), a US$3 billion nickel processing company operating in North Morowali, Central Sulawesi, faces potential shutdown, risking the livelihood of over 10,000 Indonesian workers and over 1,000 foreign workers it employs.

According to Bloomberg, PT GNI is delaying payment to local nickel suppliers, causing supply disruptions. In response, the plant has cut nickel production significantly. According to local informants, multiple production lines have ceased operations, and many migrant Chinese workers have been sent home. 

GNI’s production slash has been associated with multiple factors. Last October, its parent company Jiangsu Delong Nickel Industry Co. declared bankruptcy, due for a debt restructuring. This has affected its wholly owned subsidiary, GNI’s finances. 

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PT VDNI

Located in Morowali Regency, Central Sulawesi near PT IMIP, PT Virtue Dragon Nickel Industry (VDNI), also faced increased protests gathered around the facility in recent weeks. 

Protesters, organized by different trade unions and civil society groups, rallied near the plants on different dates. They are nonetheless united by shared demands: They called for VDNI to also improve health and safety standards and increase wage standards. 

While protesters gathered outside of the facility, Chinese migrant workers within the plant were gathered to defend the facility. Coinciding with the date of a local trade union, KAPN’s protest, for example, a few videos became widely distributed on social media sites Instagram and Tiktok depicting a group of Chinese foreign workers wearing yellow uniforms and helmets and carrying iron bars. This sparked concern among residents, with many raising concern over local workers’ safety and calling for stricter supervision of foreign workers.

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All in all, an array of factors structured Chinese nickel plants’ operational troubles in Indonesia, possibly leading to delayed payments, decreased safety standards, among other issues. 

The nickel industry’s rapid expansion in recent years has led to concern over exhausting the country’s mineral reserves and destabilizing nickel’s market price. According to the Ministry of Energy and Mineral Resources’ records as of the end of 2024, Indonesia will have 190 nickel processors, consisting of 54 smelters in operation and 120 that are in the construction stage, while 16 are in the planning stage.

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