inside the world’s largest nickel site

On the afternoon of October 25, an explosion ripped through a factory in the massive metals complex at Morowali, a remote region in eastern Indonesia that has in recent years become the centre for the production of nickel, a metal critical to steelmaking and electric vehicle batteries.

The blast — at a steel plant owned by a unit of Chinese metals giant Tsingshan Holding Group — sparked a fire and trapped a crane operator called Gunawan. “There’s someone inside,” screamed a colleague, according to videos of the incident seen by the Financial Times. 

Some workers prayed while others sobbed as plumes of thick black smoke filled the plant and firefighters tried to douse the fire. Gunawan died later that day. Another worker was injured. 

His death at the Indonesia Morowali Industrial Park (IMIP) — the world’s largest nickel processing site which is majority-owned by China’s Tsingshan — is one of nine fatalities recorded at Indonesian nickel facilities so far this year.

Spanning 4,000 hectares and employing more than 84,000 Indonesian and Chinese workers, the IMIP complex houses around 50 tenants — many of them Tsingshan subsidiaries — including factories making nickel and stainless steel products and coal-fired power plants.

IMIP, first established in 2015, has grown rapidly since an Indonesian ban on the exports of nickel ore took effect in 2020, forcing companies to set up in-country operations to process the metal. Indonesia’s wider nickel industry has also grown quickly to become the dominant producer of the metal, thanks to the world’s largest nickel reserves and massive Chinese investment.

But workers say the success has come at a cost. In interviews with the FT, more than two dozen workers at nine companies in the IMIP complex alleged widespread lax safety practices, inadequate protective equipment, and poor communication between Indonesian and Chinese workers — resulting in unsafe working conditions and frequent accidents. Their accounts are backed up by three labour unions representing 12,000 workers. 

Nickel facilities in Indonesia recorded a total of 114 incidents that resulted in 101 deaths and 240 injuries between 2015 and the first half of 2024, according to data compiled from media reports by non-profit group Trend Asia. Nearly half of those deaths occurred at IMIP. In the first half of 2024, Trend Asia recorded five accidents at IMIP and 12 across other nickel facilities in Indonesia with eight fatalities and 63 injuries. Indonesia’s manpower ministry did not respond to FT requests for data on accidents at IMIP and other nickel facilities. 

“Production first, safety later,” said a worker at Indonesia Tsingshan Stainless Steel, another Tsingshan unit operating at IMIP. An explosion at ITSS killed 21 workers last year — the worst accident in the history of the industrial park. 

Labour conditions have attracted US scrutiny. In September, the US labour department added Indonesian nickel to its list of goods that it deems to be produced with forced labour, citing third-party reports of the alleged mistreatment of Chinese migrant workers and multiple indicators of forced labour as defined by the UN’s International Labour Organization — the globally recognised standard. The department cited deceptive recruitment, arbitrary deduction of wages, intimidation and forced overtime, among other indicators. It did not identify any specific companies.

Non-profit China Labor Watch has urged the US Customs and Border Protection agency to investigate IMIP and ban American imports of cold-rolled steel products made there. The US agency has asked the group for more details, CLW said. “A consistent pattern of labour control has been identified across facilities and compound wide,” CLW said in the petition shared with the FT. 

Following an investigation of the ITSS explosion that killed 21 workers, the Indonesian government said there were “strong indications” of violations of standard operating procedures and negligence in implementing industrial safety standards. 

The economy of the Morowali regency on Sulawesi island, where IMIP is located, has been transformed by nickel. Dozens of boarding houses have been thrown up for the migrant labourers who typically get 3.8mn rupiah per month ($240) as their basic wage — higher than the regency’s minimum wage of 3.4mn and the national average of 3.1mn. They also get some other benefits and overtime pay. 

But there are also risks. One former worker at Indonesia Ruipu Nickel & Chrome Alloy, a Tsingshan subsidiary in IMIP, said he quit after five years at the firm’s nickel furnace. “The wages I received did not match the risks I was taking,” he said, showing several burn scars on his forearm. He did not have proper safety equipment, he said.  

A member of medical staff at a clinic run by IMIP told the FT that accidents ranging from minor to severe injuries “happen almost daily”. “Current occupational health and safety standards are not enough,” he said.

A worker at coal producer Risun Group located within IMIP said that some staff try to hide accidents as they are penalised through pay cuts or warning letters. “The focus (on safety) is not preventive; they’re learning by accident.” Risun did not respond to a request for comment.

“Posting work accidents [online] is seen as leaking company secrets,” said one ITSS employee. A second ITSS worker said that targets can only be reached if they do not take breaks. 

Another worker said he was not allowed to do overtime — seen as essential to cover living costs — as retaliation for joining a union. Dangerous working conditions as well as intimidation and threats count among the ILO’s indicators of forced labour. 

Poor communication with Chinese workers — who tend to hold supervisory positions — contributes to the accidents, more than a dozen workers said. Workers communicate through gestures or apps, they said. Some are frequently moved between companies and are unfamiliar with specific safety procedures. 

IMIP’s spokesperson Dedy Kurniawan said the industrial park complies with all Indonesian laws and regulations. IMIP and its tenants have made “several efforts” to reduce accidents, he said. 

Dedy said IMIP’s tenants have standard operating procedures, regularly conduct evaluations, provide their employees with protective equipment, and check factory equipment. Employees are also briefed and trained regularly and are asked to prioritise safety and health, he added. 

The labour conditions at IMIP are “very different” from that described by the US labour department, Dedy said.

Tsingshan and the Indonesian ministry of manpower and the ministry of investment & downstreaming did not respond to requests for comment. Eternal Tsingshan, the unit of Tsingshan that oversees ITSS and Indonesia Ruipu Nickel & Chrome Alloy, also did not respond.

Indonesia has previously rejected allegations of forced labour.

The US labour department told the FT it has asked the Indonesian government to investigate nickel projects in Sulawesi — where IMIP is located.

“Our recommendations included . . . investigating and holding accountable domestic and foreign companies that violate Indonesian labour laws and regulations in the production of nickel, as well as increasing the number of labour inspections in industrial parks of Central and South Sulawesi and in their surrounding nickel mining projects,” the US labour department told the FT.  

The US department has also asked Indonesia to better protect migrant workers, who non-profit groups say face higher risks of abuse. 

Chinese migrant workers, who reportedly account for about 13 per cent of the total workforce, live in dormitories within the IMIP compound, and have their passports confiscated and movements restricted, according to China Labor Watch and Indonesian workers. There were no Chinese workers visible outside the complex in Morowali while FT reporters were there. Passport retention and restricted movements are also among the ILO’s indicators of forced labour. 

IMIP did not respond to a request for comment on China Labor Watch’s call for a US investigation of the facility. US Customs said it does not comment on specific investigations and that it is unable to disclose information regarding forced labor enforcement activities.

Meanwhile at the Dexin Steel Indonesia plant, where Gunawan was killed, unions say attempts to speed up the production process contributed to his death. Tsingshan did not respond to a query on Gunawan’s death. IMIP confirmed the incident at DSI and the death of Gunawan, but did not comment on the unions’ allegation. It was not possible to reach DSI.

Within days of the DSI incident, there was another accident at IMIP — a series of explosions at a nickel plant operated by Zhongtsing New Energy after nickel slag came in contact with water. 

Videos shared with the FT show panicked workers running out of the plant which was enveloped by thick smoke. IMIP confirmed the incident but told the FT there were no fatalities. China’s CNGR Advanced Material, the parent company for ZNE, did not respond to a request for comment.