Last update:
2022-10-04

Delong Nickel Industrial Area, South Sulawesi, Indonesia

Delong Nickel Industrial Park, one of the largest ferronickel and stainless steel industrial parks in Indonesia, with captive CFPPs, faced some social, environmental, and labor complaints and violent protests.



Description:

The Indonesian Delong Industrial Park, is a ferronickel and stainless steel industrial park developed by China's Jiangsu Delong Nickel Co., Ltd., with a planned area of 2,200 hectares and an output capacity of 3 million tonnes of ferronickel and 2.5 million tonnes of stainless steel [1]. The industrial park was inaugurated in 2014, with two plants in Kendari and one in Morowali [1]. The first and second phases of the project have been incorporated into the China-Indonesia "Belt and Road Initiative" key project list and the Indonesian national strategic project list [2]. Phase one includes 500 hectares of land valued at US$1 billion, phase two project including 700 hectares of land and valued at US$2.5 billion of investment. The third phase of the project plans to build a ferronickel production line that is expected to process 13 million tonnes of nickel ore per year and has 1.8 million tonnes annual ferronickel production capacity, along with captive power plants, docks and other auxiliary facilities [2]. In December 2021, Indonesian President Joko Widodo inaugurated the third phase of the project, the $2.7 billion ferronickel plant of PT Gunbuster Nickel Indonesia, a subsidiary of Jiangsu Delong Nickel Industry Co. Ltd. [2], [11]. It was reported that the industrial park has provided 30,000 jobs for local people, accounting for 80 percent of the staff [1].

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Basic Data
Name of conflict:Delong Nickel Industrial Area, South Sulawesi, Indonesia
Country:Indonesia
State or province:South Sulawesi
Accuracy of locationMEDIUM (Regional level)
Source of Conflict
Type of conflict. 1st level:Industrial and Utilities conflicts
Type of conflict. 2nd level:Thermal power plants
Mineral processing
Specific commodities:Steel
Coal
Nickel
Project Details and Actors
Project details

Indonesia's strategy to process nickel ore domestically (both for the steel industry and eventually also for batteries for electric vehicles) is increasing the number of smelters, which often get energy from captive CFPP. Indonesia is not only the biggest producer of nickel ore but also aims to become the largest producer of refined nickel. This has been described as "resource nationalism". Restricting exports of nickel ore aims to preserve the country’s mineral resources while promoting foreign investment in value-added production facilities of nickel pig iron (NPI) and ferronickel (inputs for stainless steel) as well as stainless steel production. Indonesia's plans include nickel-based inputs for lithium-ion batteries for electric vehicles.

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Project area:2,200
Level of Investment for the conflictive project6,200,000,000
Type of populationRural
Affected Population:5,000
Start of the conflict:01/01/2019
Company names or state enterprises:Jiangsu Delong Nickel Industry Co., Ltd. from China - Owner of the industrial park
PT Gunbuster Nickel Indonesia from Indonesia
PT. Virtue Dragon Nickel Industry (VDNI) from Indonesia - Owner of third phase of the industrial park
PT Obsidian Stainless Steel (OSS) from Indonesia - A company at the Delong industrial park
Xiamen Xiangyu Group (Xiangyu) from China - Parent company and shareholder of a nickel smeltering company in Delong industrial park
Relevant government actors:North Konawe Regency government
International and Finance Institutions
Environmental justice organizations (and other supporters) and their websites, if available:Motui villagers
Conflict & Mobilization
IntensityHIGH (widespread, mass mobilization, violence, arrests, etc...)
Reaction stageIn REACTION to the implementation (during construction or operation)
Groups mobilizing:Industrial workers
Local government/political parties
Neighbours/citizens/communities
Forms of mobilization:Official complaint letters and petitions
Street protest/marches
Impacts
Environmental ImpactsVisible: Air pollution, Surface water pollution / Decreasing water (physico-chemical, biological) quality, Groundwater pollution or depletion
Potential: Global warming, Noise pollution
Health ImpactsVisible: Other environmental related diseases
Other Health impactsRespiratory health impact on local residents
Socio-economical ImpactsVisible: Loss of livelihood
Outcome
Project StatusIn operation
Conflict outcome / response:Under negotiation
Do you consider this an environmental justice success? Was environmental justice served?:Not Sure
Briefly explain:While the company promised to upgrade coal transportation methods (e.g. conveyor belt), it is unclear if the environmental pollution and health impact has been properly addressed.
Sources & Materials

[1] X. Wang, “BRI Project Promotes Industrial Upgrade in Indonesia,” Science and Technology Daily, Sep. 09, 2022. http://www.stdaily.com/English/WorldNews/202209/9377fe8746c84bab9f99e6e2758926f8.shtml (accessed Oct. 02, 2022).
[click to view]

[2] “The third phase of Delong Industrial Park in Indonesia has been signed,” SMM News, Jan. 14, 2022. https://news.metal.com/newscontent/101726334/the-third-phase-of-delong-industrial-park-in-indonesia-has-been-signed (accessed Oct. 02, 2022).
[click to view]

[3] Global Energy Monitor, “Delong Nickel Phase I power station,” Global Energy Monitor, Jul. 07, 2022. https://www.gem.wiki/Delong_Nickel_Phase_I_power_station (accessed Oct. 02, 2022).
[click to view]

[4] Global Energy Monitor, “Delong Nickel Phase II power station,” Global Energy Monitor, Jul. 07, 2022. https://www.gem.wiki/Delong_Nickel_Phase_II_power_station (accessed Oct. 02, 2022).
[click to view]

[5] Global Energy Monitor, “Delong Nickel Phase III power station,” Global Energy Monitor, Aug. 05, 2022. https://www.gem.wiki/Delong_Nickel_Phase_III_power_station (accessed Oct. 02, 2022).
[click to view]

[6] “印尼巨盾镍业工业园区电厂项目12#机组正式开挖,” 电厂联盟网, Apr. 01, 2021. http://dcywlm.com/bonewse.php?id=107885 (accessed Oct. 02, 2022).
[click to view]

[7] Kamarudin, “Warga Motui Keluhkan Debu Batubara dari PLTU Perusahaan Pemurnian Nikel,” Mongabay, Sep. 21, 2020. https://www.mongabay.co.id/2020/09/21/warga-motui-keluhkan-debu-batubara-dari-pltu-perusahaan-pemurnian-nikel/ (accessed Oct. 02, 2022).
[click to view]

[8] F. Ungku and B. Christina, “Equipment torched as worker protest paralyses Indonesia nickel plant,” Reuters, Dec. 16, 2020. https://www.reuters.com/article/us-indonesia-nickel-protests-idUSKBN28Q0WR (accessed Oct. 02, 2022).
[click to view]

[9] R. Vergara, “Violent protests paralyze China-backed nickel smelter in Indonesia – reports,” S&P Global Market Intelligence, Dec. 16, 2020. https://www.spglobal.com/marketintelligence/en/news-insights/latest-news-headlines/violent-protests-paralyze-china-backed-nickel-smelter-in-indonesia-8211-reports-61772018 (accessed Oct. 02, 2022).
[click to view]

[10] Isabelle Huber, Indonesia’s Nickel Industrial Strategy.

December 8, 2021. CSIS. Energy Rewired.
[click to view]

[11] "Indonesia launches $2.7bn China-invested ferronickel smelter". (2021, December 28). Mining Technology.
[click to view]

Meta information
Contributor:EJAtlas team
Last update04/10/2022
Conflict ID:5943
Comments
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