JAKARTA (Bloomberg): Four Chinese-run nickel plants in Indonesia have shut down temporarily after a deadly landslide last month at a waste area used by one of the facilities, a sign that companies are being forced to respond to greater official scrutiny of the sector.
The four high-pressure acid leaching plants operated by China’s GEM Co. at the Indonesia Morowali Industrial Park, a massive nickel-producing hub on the island of Sulawesi, have halted production while the waste site is restored, according to people familiar with the matter.
The disruptions affect facilities that jointly account for 30% of Indonesia’s HPAL capacity.
The suspension at PT QMB New Energy Materials, where the accident occurred, could last as long as three months, said the people, who asked not to be named citing private matters. The QMB plant is the biggest of the four, and GEM is a major shareholder along with Chinese producer Tsingshan Holding Group Co.
The government has threatened to revoke QMB’s environmental permit following the incident, which killed one worker. Morowali was the location of a massive explosion in 2023 that cost at least 21 lives, a disaster that prompted demands for tighter regulation of the industry.
GEM’s other operations in the area have also stopped production, the people said. Those factories are under operational review and could restart in a few weeks, according to one. The other three suspended plants - PT Green Eco Nickel, PT Meiming New Energy Material and PT ESG New Energy Material - are operated in joint ventures with partners including Indonesia’s PT Merdeka Battery Materials.
Spokespeople for GEM and the Morowali park didn’t respond to requests for comment. Requests for comment from Tsingshan executives weren’t answered. A spokesperson for Merdeka declined to comment.
HPAL plants process low-grade ore to extract the nickel used in electric vehicle batteries. The procedure generates high volumes of waste, or tailings, and experts have questioned whether it can be safely contained in a country where torrential rains and earthquakes are common.
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