Tsingshan Furnace Explosion in Sulawesi Shines Spotlight on Impact of Nickel Boom

Twenty workers were killed in an explosion at Indonesia Tsingshan Stainless Steel smelter in Morowali Industrial Park on Sulawesi island in Indonesia last December, shining a spotlight on the safety problems that are rife in the production of one of the key raw materials for electric car batteries.

Indonesia Tsingshan Stainless Steel is a subsidiary of the Tsingshan Holding Group from Wenzhou in Zhejian province, China, which is owned by self-made billionaire Xiang Guangda.

The explosion occurred while workers were conducting repairs on Christmas Eve 2023. "Residual slag in the furnace” came in contact with “flammable items” causing the furnace walls to collapse, the company said in an official statement. Local police officials say that the blast was so powerful that it destroyed the furnace and damaged the building. In addition to those killed, dozens of other workers were injured.

One of the workers killed was Muhammad Taufik, a 40-year-old welder. “The family is grieving, he was the breadwinner,” Parlin Hidayat, Taufik’s cousin, told Agence France Presse news agency. “They hope there will be no more incidents like this in the future, let him be the last victim.”

"Again we see how workers are sacrificed in pursuit of profit alone, work accidents are caused by the provision of safety equipment that has never been checked by the company, plus arbitrary working hour regulations, chaotic work rotations, and also equipment that is operated uncontrolled is a trigger for the accident to occur," Aulia Hakim, head of advocacy and campaigns at WALHI Central Sulawesi, the regional branch of Indonesia’s largest environmental group, said in a statement.

Electronics Watch estimates that there have been at least 65 such incidents in Sulawesi since 2015 that have killed dozens of workers and injured hundreds, as the nickel industry on the island has expanded unchecked in the last decade.

Nickel Boom

Indonesia sits atop one of the world’s largest known reserves of nickel. Mining companies have been extracting nickel ore from Halmahera, Sulawesi and Wawonii islands for a number of years, but the industry really took off in 2014 after then President Susilo Bambang Yudhoyono banned the export of the raw ore in 2014 in order to promote processing in the country.

This proved to be a huge boon for Tsingshan which was already active in the nickel industry in Sulawesi and had just signed an agreement to build the Indonesia Morowali Industrial Park in collaboration with a local partner, Bintang Delapan Minerals. Today the Morowali park covers almost 10,000 acres with some 50 factories, private airport and seaport and even a central kitchen that makes 70,000 meals a day for the workers.

Demand for nickel has skyrocketed in tandem with electric car sales because the metal is a key component of lithium-ion batteries. For example, in August 2022, Elon Musk, CEO of Tesla, signed an agreement with Joko Widodo, the current president of Indonesia, to buy $5 billion worth of nickel products from the country.

Between 2020 and 2022, Indonesia’s nickel production expanded to 1.6 million tonnes, almost half of global output. The Morowali industrial park’s workforce almost tripled in size from 28,000 in 2020.

“Jokowi only cares about economic development and is sidelining everything, including environment, human rights, and working conditions,” Muhamad Ikhsan, a senior researcher at the Paramadina Public Policy Institute in Jakarta, told Vice magazine. “The sector is evolving so fast that the state and society have not caught up with this industry. The company is evolving too fast. They don’t bother about working conditions and only care about money.”

Impact on Workers

The Bahodopi Community Health Center, a regional clinic that serves Morowali, estimates that over half of the patients they served in 2022 were suffering from acute respiratory infections from working at the industrial park. Many Morowali workers interviewed by Wired magazine also reported eye pain that they believe was triggered by small particles that penetrated the poorly designed safety equipment that the companies provided them with.

And Tsingshan is hardly the only nickel company on Sulawesi with problems. Similar accidents have reported at factories owned by Jiangsu Delong Nickel whose subsidiaries include Gunbuster Nickel Industry, Obsidian Stainless Steel factory, PT Dragon Virtue Nickel Industry.

In Feburary 2023, Vice magazine reported that dozens of workers have died at Jiangsu Delong Nickel’s facilities from accidental explosions, falling into smelting vats, being swept out to sea, as well as by suicide from overwork.

Indonesian unions are campaigning for this to change. “The company must take full responsibility for the accident and provide compensations to workers and their families. All companies located in IMIP (Morowali Industrial Park) must engage trade unions in improving safety standards [and] stop intimidating workers who document workplace accidents,” said Iwan Kusmawan of Serikat Pekerja Nasional union in a press release.