Reporting: Katerina Barton
Photography: Claire Harbage
Graphics: Connie Hanzhang Jin
Published May 7, 2026
Over the past decade Indonesia has built the world’s largest nickel industry and now supplies more than half of global nickel. Much of that metal still goes into stainless steel, but an expanding share is directed to batteries for electric vehicles and large data centers. The government promotes nickel as the backbone of a domestic green‑energy industrial future. Yet the rapid expansion has produced steep environmental and social costs across Sulawesi.
Refining capacity is heavily backed by foreign investment, especially Chinese firms. The United States has moved to secure Indonesian nickel to reduce reliance on China, underscoring how the metal has become strategically important. Mining and processing remain concentrated on Sulawesi: the number of active mining licenses rose from one in 2005 to a peak of 408 in 2022, dipping slightly in 2023 as regulators tried to cool oversupply.
The industry’s local footprint is uneven. On Labengki Island a Bajau fishing community of roughly 500 people largely retains a traditional coastal way of life; nearby waters stay clear, coral reefs survive and marine life persists. An hour by boat away, however, mining has reshaped the landscape. Boenaga, a comparable Bajau village on the mainland, is surrounded by deforested hills, exposed red earth and processing sites. Village officials point to benefits: utilities paid by companies, monthly payments tied to shipments and employment. Many families rely on company income. Fishermen report they must travel farther to fish, increasing fuel costs while catches decline.
Conservationists and local activists describe mounting ecological damage between those communities. Habib Nadjar Buduha, who runs a giant clam conservation group, has recorded declines in clam populations and rising sedimentation on reefs. Giant clams are filter feeders; sediment and heavy metals can suffocate or poison them. Even waters five miles from the nearest mine that were once clear have grown cloudy, and reefs are being smothered.
Industrial expansion continues. The Indonesia Pomalaa Industrial Park (IPIP), pitched as an EV‑battery hub, is being built in Southeast Sulawesi. Farmers near the site say roads and clearing went through their land without meaningful compensation; some allege inadequate payments where land was designated of “national importance.” IPIP’s main investors include Huaxing Nickel Indonesia (a Zhejiang Huayou Cobalt unit) and Rimau New World. Inside the park, a battery materials plant lists investment from Huayou Indonesia, Vale Indonesia and Ford Motor Co. Companies contacted by reporters either declined to comment or said land acquisition and operations comply with Indonesian rules.
Morowali Industrial Park (IMIP) in Central Sulawesi is often described as the epicenter of the nickel boom. Built beginning in 2013, IMIP covers thousands of acres with smelting and processing facilities largely powered by coal. The complex has drawn waves of migrant workers and generated new housing, markets and services, but it has also blanketed the region in smog. Local clinics and the regional hospital report sharp increases in respiratory illnesses: cases of acute respiratory infections and other pulmonary diseases have climbed since the park’s expansion. Medical staff warn the pollution likely contributes to worsening respiratory problems, though many residents say they have little choice but to stay for jobs.
Worker safety has also been criticized. IMIP has appeared in union reports documenting a high number of workplace accidents and fatalities since 2016. Labor organizers say investors often prioritize production and profit over worker welfare and safety standards.
Not every community accepts the tradeoffs. Near a coal‑fired power plant run by Chinese‑owned Obsidian Stainless Steel inside the Virtue Dragon Nickel Industry Park, villagers in Morosi say the plant pollutes land and waterways used for shrimp and fish farming. Tens of thousands of shrimp died in one locality last year; residents describe black soot on their hands and contaminated irrigation channels. Villagers have petitioned local lawmakers and filed lawsuits against the company and park operators; legal cases and enforcement face complications from overlapping local and central authorities.
There are also examples of successful resistance. On Wawonii Island, residents of Roko‑Roko waged a decade‑long fight against Gema Kreasi Perdana (GKP), accusing the company of clearing farmland, contaminating a spring and intimidating protesters. After protests, arrests and a prolonged legal campaign, Indonesia’s Supreme Court issued a ruling that led to the mine’s closure at the end of 2025. Since then locals say fish have returned to rivers and farmers have reclaimed land, though they remain vigilant as other companies could seek permits in the area.
Across Sulawesi the pattern repeats: mining and processing bring jobs, infrastructure and investment for some while degrading air, water, fisheries and farmland for many others. Companies and some local officials emphasize economic opportunity and adherence to regulations. Environmentalists, community leaders and health professionals warn of lasting harm to ecosystems and public health. Legal challenges, community organizing and monitoring by conservation groups have produced mixed outcomes: some communities won protections, but in many places the industry presses forward.
Indonesia faces a paradox. Its nickel is essential to global decarbonization goals, yet extracting and processing it often depends on fossil fuels and practices that harm local livelihoods and ecosystems. As demand for battery metals grows, the choices Indonesia makes about balancing economic ambition, foreign investment and the rights and health of communities will shape both local futures and the global transition to cleaner energy.