A nickel mining site in Indonesia. Screenshot from CNBC YouTube video. Fair use.

This article was submitted as part of the Global Voices Climate Justice Fellowship, which pairs journalists from Sinophone and Global Majority countries to investigate the effects of Chinese development projects abroad.

Joko, 49, paddled his canoe across the murky seawater to his home in Kurisa village, a sleepy fishing town in Central Sulawesi, Indonesia. After floating for eight hours in the Banda Sea, armed with bait and four liters of diesel priced at IDR 100,000 (USD 6), he was hoping to bring back some catch worth at least twice the price of his gas. He handed his fish over to his wife, who deftly placed them into a dark green basin: a few red snappers and skipjack tuna weighing only two kilograms. Just enough to keep a family of five fed for a few days. 

Joko is one of the few fishermen left in Kurisa, home of the Indigenous  Bajau community. Years ago, crystal-clear water surrounded Kurisa with flashy coral reefs and schools of fish. Now, the water has turned opaque and polluted, with no fish to catch. The quality of the seawater has decreased as nickel mines and factories have been erected, polluting the surrounding ecosystem and destroying local livelihoods. Joko said:

In the past, we only needed to spread a net under our house, wait an hour, and we got 10 kilos. Now, we are grateful to be able to bring home five kilos of fish after sailing miles away for hours.

Joko and tens of thousands of people in Bahodopi saw their lives dramatically change after the boost of nickel production in their homeland. 

Indonesia is home to the world’s largest nickel reserve, totaling 5.2 billion tons of ore and 57 million tons of metal, equivalent to 42 percent of the world’s nickel reserves. These resources are scattered mostly in Sulawesi and Maluku, in the eastern part of Indonesia. One of the richest mines is located in Joko’s hometown, Bahodopi district in Sulawesi.  

A map of Indonesia. Screenshot from BBC's Youtube video. Fair use.

The rising demand for nickel

Nickel mining in Sulawesi began in the early 2000s, but it took off in the last decade after a surge in the global demand for nickel, a critical component of electric vehicle (EV) batteries. The worldwide transition to EVs is fueled by the pressing demand for eco-friendly transportation and a decreased reliance on fossil fuels. Capitalizing on its vast nickel reserves, Indonesia set its sights on becoming a major player in the global market by 2027. 

In 2013, Indonesia-based mining conglomerates PT Bintang Delapan Investment and PT Sulawesi Mining Investment joined forces with a Chinese mining company called  Tsingshan Holding Group Company Limited (青山控股集团有限公司) to build the largest nickel-processing center in Southeast Asia, the Indonesia Morowali Industrial Park (IMIP). The project received blessings from political leaders in both countries. In October of that year, Chinese President Xi Jinping and then-Indonesian President Susilo Bambang Yudhoyono oversaw the signing of a cooperation agreement for the industrial park. 

Chinese President Xi Jinping and then-Indonesian President Susilo Bambang Yudhoyono oversaw the signing of several business agreements in October 2013. Source: press release from the Embassy of the People’s Republic of China in Indonesia. Free to use.

Since then, China has had a significant influence on Indonesia's nickel industry. The IMIP has become one of the key projects of China's Belt and Road Initiative (BRI), its international connectivity plan involving development and infrastructure projects in Global Majority countries.

In discussing Indonesia's role in the BRI, Chinese state-owned media People’s Daily claimed that Indonesia still lacked the infrastructure and human resources to manage its abundant reserves of nickel ore. 

印尼红土镍矿储量和产量丰富，但基础设施薄弱、工艺落后、人才不足等因素制约了当地镍矿加工业发展. 青山莫罗瓦利园区负责人章凡表示，以不锈钢生产为主业的中国青山控股集团2009年进入印尼。2013年10月，莫罗瓦利园区签约开建。园区一边搞基建，一边将产业链优势互补的中国镍铁冶炼企业吸引入园，共同投资，共担风险，抱团发展.

Indonesia has abundant reserves and output of laterite nickel ore. Still, factors such as weak infrastructure, backward technology, and insufficient talent have restricted the development of the local nickel ore processing industry. Zhang Fan, head of the Morowali Industrial Park of Tsingshan, said that China's Tsingshan Holding Group mainly produces stainless steel entered Indonesia in 2009. In October 2013, the Morowali Industrial Park was signed and started construction.

The price of development

Lapola, 36, a fisherman from Tapunggaeya village in North Konawe, Southeast Sulawesi, is dealing with a similar problem to Joko’s. The seawater around his village has now turned brown, depleting the fish in the bay. With no income from fishing, Lapola decided to work for the mine. Polluted water has forced many of the villages’ young people to switch from fishing to mining. Lapola told Global Voices in an interview:

Young people have migrated to work in the nickel mines or factories. Now, only the elderly stay because they can't work in the mines. Sometimes, they go to the sea, but it's futile.

Polluted waters in Sulawesi, Indonesia, are leaving many fishing communities with no ability to make a living. Screenshot from BBC YouTube video. Fair use.

Katsaing, Chairman of the Prosperous Indonesian Workers Union, stated that many workers have been complaining about poor work conditions: lack of safety measures, long hours of work, unfair work agreements, and low salaries. Katsaing mentioned that many work agreements only last for three months, leaving workers, who are mostly only high school graduates, in precarious positions

Most who can’t meet the factory requirements still work in agriculture and fisheries. Some have opened small businesses: parking lots, street stalls, and repair shops have sprung up to cater to the growing community. However, their living conditions are not much better. 

Ani, a young mother of two from Fatufia village, suffered because the dust and air pollution made her second child sick with acute respiratory problems that forced her to regularly visit health facilities for almost two years. Rest of the World reported that, according to the community health center of Bahodopi, since 2018, upper respiratory infections have been the most prevalent disease in the district, totaling nearly 7,000 cases. Health workers attribute this to dust from the industrial complex.

Over the last decade, China has invested over USD 65 billion in Indonesia’s nickel industry. An official statement from the Indonesian government shows that China controls 90 percent of the nickel mines and smelters. This situation leaves Indonesia in a challenging position to escape from China’s control over its nickel reserves, particularly as the government aims to attract more investors from the US and Europe. 

Environmental concerns

Environmental issues are still unresolved in Morowali. Aside from the damage caused by the mining itself, IMIP’s smelters are powered by a coal-fired power plant that creates significant carbon emissions. According to the Indonesian Ministry of Energy and Mineral Resources, each 1 GW coal-fired power plant produces 5 million tons of CO2. Residents have also long been complaining about water and air pollution, health issues, and deforestation in their community. 

Once lush and green, today, the hills in Morowali are mostly giant brown mounds because of mining activities. When rain falls, the soil from the hills pollutes the waterways of rice fields and rivers and turns the water an orange-brownish color. Hot water discharge from the Steam Power Plant turbine that supplies electricity to industrial areas streams directly into the sea, raising water temperatures, damaging coral, and driving fish out of the bay.

Aerial footage of the effects of nickel mining. Screenshot from BBC YouTube video. Fair use.

The smoke released from smelter furnaces every six hours turns the sky gray and showers people with back dust, causing people’s clay roofs to rot and dirtying people’s floors and kitchens. 

A report by Rosa-Luxemburg-Stiftung (RLS), a German policy lobby group, stated that nickel-processing plants at IMIP release pollutants such as sulfur dioxide, nitrogen oxides, and coal ash — all of which pose serious health risks when inhaled. Inhabitants suffer from respiratory problems because of the dust and itchy skin caused by polluted water. Worse, many can’t afford to access health facilities. 

After a decade of operating, IMIP is now home to more than 50 smelters and around 84,000 workers, including 10 percent from China. Spanning ​​more than 4,000 hectares, the complex features its own airport, seaport, high-end hotels, staff dormitories, and other essential facilities. IMIP produces a total of 4.76 million tons of Nickel Pig Iron (NPI), with the majority exported to China.

Its iron grip over nickel resources helped China dominate the global EV manufacturing industry and isn't poised to loosen any time soon.