Elections: China Downstream, The Tentacles of Indonesia’s Nickel Oligarchy By Project Multatuli, Part 4

Mapping the business landscape of companies and mining tycoons benefiting from the “downstreaming” policy of Joko Widodo’s government on nickel mining…

Editor

October 15, 2024

8–12 minutes

Business, Canada, China, Development, Economics, Election Campaign, Elections, EV, Gibran, History, Indonesia, Japan, Joko Widodo, Jusuf Kalla, Lingkungan Hidup, Maluku, Metals, Mining, New Order, Nickel, Orde Baru, Pembangunan, Pemilu 2024, Politics, Sandiaga Uno

China Downstream: The Tentacles of Indonesia’s Nickel Oligarchy, Part 4

By Project Multatuli & Viriya Singgih, February 2, 2024

Part 1 Part 2 Part 3 Part 4 Part 5

3. PT Weda Bay Nickel

Nickel Concession: 45,065 hectares
Operating Area: North Maluku
Nickel Resources: 634.9 million tons
Nickel Ore Production: 21.1 million tons (2022)

PT WEDA BAY NICKEL is a joint venture between the state-owned enterprise PT Aneka Tambang and Strand Minerals, with ownership stakes of 10% and 90%, respectively. Initially owned by Canada-based Weda Bay Minerals, Strand Minerals has been conducting exploration activities in Halmahera Island, North Maluku, since 1996.

PT Weda Bay Nickel signed a Generation VII Contract of Work with the Indonesian government on January 19, 1998, obtaining a 30-year license to mine nickel on a 120,500-hectare site in Central Halmahera and East Halmahera.

Several rounds of negotiations with the government led to a reduction of the company’s concession to 45,065 hectares, with estimated nickel ore resources of 634.9 million tons as of January 2019.

Four months after the Contract of Work was signed, the authoritarian president Soeharto stepped down in wake of the democracy reform movement (Reformasi). Soeharto’s loyal vice president BJ Habibie then served as president until being succeeded by Abdurrahman Wahid, known affectionately as Gus Dur, in October 1999. About a month before stepping down, Habibie issued Law No. 41/1999 Concerning Forestry, which posed challenges for PT Weda Bay Nickel, and various other mining companies.

The regulation prohibited open-pit mining in protected forest areas. However, PT Weda Bay Nickel’s concession encompassed the 35,155-hectare Ake Kobe protected forest. As a result, the company halted its exploration activities in 2001.

PT Weda Bay Nickel, along with 11 other companies including PT Freeport Indonesia, PT Vale Indonesia, and PT Aneka Tambang, negotiated with the government to obtain exemptions on the grounds that their permits were issued before the 1999 Forestry Law came into force. Their efforts succeeded, and the government amended the law in 2004, allowing them to resume operations.

In May 2006, the French mining company Eramet S.A. acquired Weda Bay Minerals, gaining 90% control of PT Weda Bay Nickel through Strand Minerals. Attracted by the vast nickel potential in Halmahera, Mitsubishi Corp. purchased a 33.4% stake in Strand Minerals in February 2009.

Four months later, the government approved the Environmental Impact Analysis (AMDAL) study for PT Weda Bay Nickel, although the process was allegedly flawed.

For instance, during the public consultation phase, representatives of the local indigenous Sawai people living in the company’s concession area received hundreds of pages of documents to review just moments before the meetings. As a result, the local indigenous community did not fully understand the document’s contents, and were unaware that mining activities would encroach on their traditional plantation lands.

After the completion of the AMDAL, a lengthy negotiation process began with a view to acquire traditional customary title lands within PT Weda Bay Nickel’s concession area. Initially, the company’s offer of Rp7,000-8,000 ($0.50) per square meter was rejected. However, after incidents of horizontal violence and intimidation through criminalization, the company gradually gained control over the lands and livelihoods of the local communities.

The economic crisis in Europe, and an oversupply of nickel, led to a sharp decline in the global nickel price, causing significant losses for many mining companies in 2013, including Eramet. This subsequently prompted Eramet, Mitsubishi, and Pacific Metals (which acquired a 3.4% stake in Strand Minerals from Mitsubishi in 2011) to postpone their investments in the Halmahera mining project.

Another significant factor was Indonesia’s plan to ban nickel ore exports starting in early 2014 to promote the development of (downstream) domestic mineral processing industries.

The uncertain situation eventually led Mitsubishi and Pacific Metals to withdraw from the Halmahera mining project. They sold back all their shares in Strand Minerals, totaling 33.4%, to Eramet in April 2016.

Eramet saw a glimmer of hope a year later. On January 11, 2017, Indonesia eased its export ban, and allowed certain commodities to be sold abroad, including nickel ore with a grade below 1.7%. One condition was that companies had to build new smelters in Indonesia within five years.

In 2017, Eramet signed a cooperation agreement with Tsingshan Holding Group, a Chinese stainless steel giant, to revive PT Weda Bay Nickel. Tsingshan officially took control of 57% of Strand Minerals, while the remainder was held by Eramet.

After securing a nickel ore supply from PT Weda Bay Nickel, Tsingshan, along with several partners from China, proceeded to build the Weda Bay Industrial Zone in Central Halmahera in 2018.

This zone, which has been listed as a National Strategic Project (PSN) since November 2020, is managed by PT Indonesia Weda Bay Industrial Park (IWIP). It is expected to attract investments worth US$15 billion (Rp232.9 trillion) by 2024, and covers an area of approximately 5,000 hectares as of 2022.

As of 2023, Tsingshan controls 46% of PT IWIP through its subsidiary Perlux Technology. Two Chinese companies, Zhenshi Holding Group and Huayou Holding Group, each hold 24% of PT IWIP through their Hong Kong-based subsidiaries Cornerstone Investment and Huachuang International Investment. Additionally, Contemporary Amperex Technology (CATL), a Chinese battery manufacturer, holds a 6% stake in PT IWIP through its subsidiary Brunp and Catl in Hong Kong.

According to a study released by the Ecological Action and People’s Emancipation Association in July 2023, nickel mining and the development of the PT IWIP industrial zone have caused various social, environmental, and health problems, particularly in four villages in Central Halmahera: Lelilef Sawai, Lelilef Woebulen, Gemaf, and Sagea Villages.

However, Tsingshan and Eramet appear increasingly determined to develop the Halmahera project.

Eramet aims for PT Weda Bay Nickel to increase nickel ore production to 30 million tons by 2023. PT IWIP is reportedly continuing its expansion efforts, with plans to expand its industrial zone to 15,000 hectares.

In 2022, Eramet established a local entity, PT Eramet Indonesia Mining, and began exploring new mining areas in Indonesia. Together with BASF, the German chemical giant, Eramet plans to build a new HPAL plant with an estimated cost of US$2.6 billion (Rp40.4 trillion) in Halmahera, which will produce nickel-cobalt for electric vehicle batteries.

In 2023, Eramet partnered with the Kalla Group, owned by entrepreneur and former Vice President Jusuf Kalla, to form PT Eramet Bumi Sulawesi. Data from the Ministry of Law and Human Rights shows that this company operates in the nickel ore mining sector, with 70% of the shares held by PT Eramet Indonesia Mining and 30% controlled by PT Bumi Mining Lestari, a part of the Kalla Group.

In July 2023, the Kalla Group signed an agreement with Eramet, Volkswagen Group’s battery company PowerCo S.E., and the automotive company Stellantis N.V. from the Netherlands to build an Environmentally Friendly Electric Vehicle Center (RGEV) in Indonesia.

Tsingshan also partnered with the Bintangdelapan Group, owned by entrepreneur Halim Mina, since 2013 to develop the Morowali Industrial Zone in Central Sulawesi managed by PT Indonesia Morowali Industrial Park (IMIP). This zone is said to have attracted investments of up to US$20.93 billion (Rp324.4 trillion) with an area of 4,000 hectares as of 2022.

Retired Lieutenant General Sintong Panjaitan serves as the president commissioner of several key companies within the Bintangdelapan Group. He also serves as a commissioner of PT Adimitra Baratama Nusantara, a coal miner in East Kalimantan controlled by PT TBS Energi Utama, owned by Coordinating Minister for Maritime Affairs and Investment Gen. (Hon) Luhut Binsar Pandjaitan. PT TBS Energi Utama later partnered with PT GoTo (Gojek-Tokopedia) through a joint venture called PT Energi Kreasi Bersama (Electrum) to build a domestic electric motorcycle factory in Cikarang, West Java.

Zhejiang Huayou Cobalt, a subsidiary of Huayou owning 24% of PT IWIP, also partnered with PT Vale Indonesia to develop two new HPAL smelters, one in Kolaka (Southeast Sulawesi) and one in Luwu Timur (South Sulawesi).

Huayou also teamed up with Tsingshan to build an RKEF plant and an HPAL plant in the PT IWIP area, as well as an HPAL facility in the PT IMIP area.

In addition to these projects, Huayou is preparing to build the Pomalaa Industrial Zone in Kolaka with a planned area of up to 11,808 hectares. This zone, managed by PT Indonesia Pomalaa Industry Park (IPIP), has been listed as a National Strategic Project since December 2022, and is expected to attract initial investments of US$10 billion (Rp154.3 trillion).

Huayou controls 70% of PT IPIP through its subsidiary Huaxing Nickel. The remaining 30% is held by PT Rimau New World, a joint venture controlled jointly by Chinese investor Huang Yeping and the Rimau Group owned by entrepreneur Antonio Yatmiko. Rimau Group’s subsidiaries are mainly engaged in coal mining, with concessions covering at least 6,000 hectares in Kalimantan Island.

Huayou also indirectly controls 7.55% of PT Merdeka Battery Materials, the majority owner of PT Sulawesi Cahaya Mineral, which holds a nickel mining concession of 21,100 hectares in Konawe, Southeast Sulawesi.

PT Merdeka Battery Materials is a subsidiary of PT Merdeka Copper Gold, a local mining company jointly owned by several tycoons including Garibaldi “Boy” Thohir, Edwin Soeryadjaya, Sandiaga Uno, and Winato Kartono. CATL from China also indirectly holds a 5% stake in PT Merdeka Copper Gold.

On the other hand, Zhenshi, which controls 24% of PT IWIP, owns 70% of PT Fajar Bhakti Lintas Nusantara, a nickel miner on Gebe Island, Central Halmahera. The remaining 30% of PT Fajar Bhakti is controlled by PT Halmahera Sentra Mineral, an iron sand miner in North Halmahera owned by the family of entrepreneurs Agung Dewa Chandra and Maria Chandra Pical. This family also controls PT Gebe Sentra Nikel, another nickel miner on Gebe Island.

This couple’s business seems to be in trouble. PT Halmahera Sentra Mineral’s mining permit for iron sand was initially declared clean and clear (CnC) or compliant with mining regulations, but was revoked by the government in 2011.

The Investment Coordinating Board also revoked the mining business license of PT Gebe Sentra Nikel in April 2022 and PT Fajar Bhakti in September 2023. Furthermore, Maria was reportedly involved in giving bribes of Rp250 million to former Mayor of Ambon Richard Louhenapessy from 2011 to 2022.

Another company, PT Daya Listrindo Utama, is a shareholder in two companies affiliated with PT IWIP. It owns 51% of PT Weda Bay Port, which manages port services, and 10% of PT Weda Bay Energi, which operates a 250-megawatt power plant in the PT IWIP industrial zone.

PT Daya Listrindo Utama is part of the Aserra Group, controlled by the trio of entrepreneurs Zainal Abidinsyah Siregar, Irawan Sastrotanojo, and Erwin Sutanto. Aserra Group’s subsidiaries are involved in oil and gas exploration and exploitation, coal and nickel mining, oil palm plantations, property leasing, electric vehicle production, and more.

One of Aserra Group’s subsidiaries is PT Citra Lampia Mandiri, a nickel miner with a concession area of 2,660 hectares in Luwu Timur. 59.5% of the company’s shares are held by Junaidi, a close associate and legal representative of Andi Syamsuddin Arsyad aka Haji Isam. The latter is a businessman from South Kalimantan and the owner of Jhonlin Group, which operates businesses in the coal mining, oil palm and rubber plantations, aviation, and other sectors.

Haji Isam indirectly controls the majority of PT Citra Lampia Mandiri’s shares after reportedly assisting in the mediation process and winning against Zainal in an ownership dispute against Helmut Hermawan. In this complex dispute process, Helmut is alleged to have bribed former Deputy Minister of Law and Human Rights Edward Omar Sharif Hiariej with a total of Rp 8 billion ($US533,000) to safeguard his interests.

Another subsidiary of Aserra Group, PT Nusajaya Persadatama Mandiri, holds a mining permit for nickel in an area of 1,825 hectares in Morowali. There is also PT Alessa Motors Nusantara, which produces batteries and electric motorcycles.

Part 1 Part 2 Part 3 Part 4 Part 5

This article is based on https://projectmultatuli.org/cina-di-hilir-gurita-oligarki-nikel-indonesia/.

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One response to “Elections: China Downstream, The Tentacles of Indonesia’s Nickel Oligarchy By Project Multatuli, Part 4”

Siapa Pemilik IMIP Morowali dan IWIP Halmahera?

November 26, 2025 at 7:11 pm

[…] IWIP (kadang disebut Weda Bay Industrial Park) berada di Pulau Halmahera, Provinsi Maluku Utara — dibangun untuk memperluas kapasitas smelter & hilirisasi nikel/EV‑battery supply chain. Stories From Indonesia+2Business & Human Rights Resource Centre+2 […]

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