Indonesia’s Nickel Business Is Boosting Development and Ruining Lives
Even after 33 days in the hospital, eight operations, and more than a year of recovery, La-Taha still does not have full use of his hand. Burns have left it a gnarled mess; like his scarred torso, it also itches and cramps. All this is the legacy of an explosion at a nickel smelter owned by Indonesia Tsingshan Stainless Steel, a subsidiary of the Chinese steel and nickel behemoth Tsingshan Group. The explosion on Dec. 24, 2023, killed 21 workers and wounded 38 others as they went about their day’s work in the Indonesia Morowali Industrial Park (IMIP) in the country’s Central Sulawesi province.
The company hastily announced that the families of the dead would receive 600 million rupiahs (about $37,000), and that the wounded would receive lump sums of 10 million rupiahs (about $620). La-Taha, however, claims that he received nothing. In the hospital, he lived on half pay while the costs of care ate up his savings. With few other options, he has gone back to work in the same industrial park where the union that he is part of, Serikat Buruh Industri Pertambangan (SBIPE, or the “Mining Industry Workers Union”), provides him with support.
Even after 33 days in the hospital, eight operations, and more than a year of recovery, La-Taha still does not have full use of his hand. Burns have left it a gnarled mess; like his scarred torso, it also itches and cramps. All this is the legacy of an explosion at a nickel smelter owned by Indonesia Tsingshan Stainless Steel, a subsidiary of the Chinese steel and nickel behemoth Tsingshan Group. The explosion on Dec. 24, 2023, killed 21 workers and wounded 38 others as they went about their day’s work in the Indonesia Morowali Industrial Park (IMIP) in the country’s Central Sulawesi province.
The company hastily announced that the families of the dead would receive 600 million rupiahs (about $37,000), and that the wounded would receive lump sums of 10 million rupiahs (about $620). La-Taha, however, claims that he received nothing. In the hospital, he lived on half pay while the costs of care ate up his savings. With few other options, he has gone back to work in the same industrial park where the union that he is part of, Serikat Buruh Industri Pertambangan (SBIPE, or the “Mining Industry Workers Union”), provides him with support.
For more than two decades, Indonesia has deindustrialized, with manufacturing as a percentage of GDP declining from 32 percent in 2002 to 18.7 percent in 2023. If it is to become a developed country, it needs more high-value-added manufacturing. Policymakers are hoping that nickel will be the source of an Indonesian industrial revolution.
In 2023, the U.S. Geological Survey estimated that Indonesia accounted for 42 percent of global nickel reserves and 51 percent of global mine production for the mineral. That supply is now paired with the growing demand for nickel as a critical mineral used for batteries and other components of Chinese industrial might. But this bet on development has come with human cost.
In just under a decade, Indonesia has gone from bit player to dominating the global nickel market. In 2023, S&P Global estimated that it was responsible for 40.2 percent of global nickel production, and experts predict that this share could rise to 75 percent this decade. By comparison, the highest share of global oil production commanded by Saudi Arabia was © Foreign Policy
