Police have ordered operations at the plant to stop until an investigation is completed.

Hundreds of workers at the Indonesia Morowali Industrial Park (IMIP) on Sulawesi Island have protested against working conditions after 19 people were killed and many more reportedly injured by an explosion at a smelter operated by PT Indonesia Tsingshan Stainless Steel (ITSS). The operation was suspended while local police conducted investigations. According to reports, demonstrators submitted a list of 23 demands including improved healthcare and safety standards in a letter sent to police by unions representing the workers.

Supported by its nickel ore export ban, Indonesia has rapidly become a key nickel-producing region and has accounted for most of the metal’s supply growth over the last decade. Last year, Indonesia accounted for slightly over 50% of global mine supply and 40% of refined nickel supply according to Project Blue estimates. It initially focused on smelting the country’s abundant laterite reserves into nickel pig iron (NPI) for use in stainless steel. More recently, there has been a focus on producing nickel intermediates to supply the EV battery supply chain. There are four high-pressure acid leach (HPAL) plants now in operation in Indonesia and many more in the pipeline, mainly with Chinese investment.

However, a ‘ramp-up at all costs’ mentality at many of the country’s nickel operations has negatively impacted environmental and social performance. Nickel from Indonesia continues to attract scrutiny, with most of the focus in the past relating to environmental aspects. The tragic event at the end of last year has now further brought into question the implementation and adherence to worker safety standards. Two workers were killed in January 2023 following a clash at a protest organised by a labour group at PT Gunbuster Nickel Industry (PT GNI), a unit of China’s Jiangsu Delong Nickel Industry, which operates in central Sulawesi. According to local media reports, protesters demanded better safety conditions and pay.

Continuing a recent trend, companies, particularly those operating in Western jurisdictions, will come under rising pressure to provide more transparency on the sourcing of raw materials, including ESG impacts. Such ESG audits will become an increasingly important part of raw material procurement decision-making, where automakers and OEMs will have to balance ESG performance alongside massive raw material requirements, particularly in the battery space.