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Nickel industry’s toll on Morowali’s future
To give Morowali breathing room to exercise their economic diversification, a halt to the expansion of the nickel industry is necessary.
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PT Indonesia Morowali Industrial Park (IMIP), one of the biggest nickel producers in North Konawe, Central Sulawesi, is seen from above on May 14, 2023. (AFP/Riza Salman)
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n early 2025, PT Gunbuster Nickel Industry (GNI), a nickel juggernaut, is teetering on the brink of bankruptcy as its parent company in China, the Jiangsu Delong Nickel Industry, is struggling with debt restructuring. This has cast uncertainty on the fate of its nickel processing plant in Morowali regency, Central Sulawesi.
Furthermore, the majority of nickel production nickel smelters in Indonesia are in the form of ferronickel and nickel pig iron (NPI), which are mostly shipped to China to be further processed into steel products.
With both the capital and the market highly integrated with China, the risk of negative exposure due to the slow down of China’s economy and the looming trade war with the United States is considerable.
This risk has to be hedged, and ultimately the nickel boom cannot last indefinitely. For affected areas such as Morowali, some measures of economic diversification are required, ones that are more sustainable than the nickel industry.
This is difficult to achieve at the regional level, as the nickel mines and smelters have damaged the area on which they are based and this has made diversification efforts toward a more sustainable economy extremely challenging.
At one CELIOS webinar about Economic Diversification for Non-mining Sectors, the Head of Morowali’s regional development planning BAPPEDA, Hasyim, remarked, “all of these [diversification programs] are very good suggestions, but if we don’t stop [the nickel industry] first, we cannot start with [diversification].”
That one sentence summed up the whole conundrum about economic diversification in Morowali. Many diversification programs in agricultural, fisheries and tourism sectors that can be pursued in Morowali have been slowly eroded by the nickel industry.
