Rohani, 50, was sorting used water bottles in the front yard of her shanty, which had a roof made from used sheet metal. The shanty is a mere 500 meters from a mining company’s ferronickel factory in Kolaka regency.
In the shanty are sacks of used plastic waste and various trinkets. A used goods collector, Rohani depends on selling the items she collects to make a living.
“This afternoon, I will take [these items] to some buyers. If I don’t sell anything today, what will my kids eat? I have no rice and no money,” Rohani said at her home in Dawi-Dawi subdistrict, Pomalaa district, Kolaka regency, Southeast Sulawesi.
Not far from Rohani’s shanty is a wooden house belonging to Nurni, 60. The two women belong to an extended family and their homes are relatively similar. Previously, they lived in Bajo kampong of Dawi-Dawi subdistrict. However, when Rohani’s husband fell ill, she had to sell her house to pay for his hospital treatment. Today, they live on land owned by a police officer in the kampong.
For some local residents, the nickel mine, which has been there since 1976, has not made much difference.
When asked what benefits she had gained since the nickel miner started operating in Pomalaa, she gave an indifferent response: “I got only dust. Sometimes I found used goods at the employees’ housing complex, if I could get in. Several times, I was caught by the security officers, who accused me of stealing.”
For some local residents, the nickel mine, which has been there since 1976, has not made much difference. Their lives have not changed. For others, the mines have robbed them of their source of livelihood.
However, for those who receive assistance, be it through the mining company’s corporate social responsibility program or another source, the company has changed their lives for the better. Pomalaa district head Sairman said that, as the district was located very close to the company’s premises, it had received plenty of assistance from the company. The company usually supported the district’s development projects.
“Each village gets different funding for a program. One village gets help to build roads, another to build a village office or an integrated healthcare post [posyandu]. The company also provides trainings for local residents,” Sairman said.
Many of the local people rent such apartments, as do laborers from beyond Morosi and even some from China.
In Konawe regency, Southeast Sulawesi, the nickel factory has raised hopes for the local economy. In Morosi village of Morosi district, PT Virtue Dragon Nickel Industry processes nickel ore into ferronickel. Of the village’s 352 household heads, 211 work at the company as drivers, heavy machinery operators, assemblers, iron welders and in logistics. They earn a monthly salary of Rp 2.05 million (US$151.7) in keeping with the 2017 minimum wage for Southeast Sulawesi.
Low-cost apartments have sprouted across Morosi in the past three years. Renting a one-room apartment costs Rp 500,000 a month on average. Many of the local people rent such apartments, as do laborers from beyond Morosi and even some from China.
Virtue Dragon Nickel Industry general manager Rudi Rusmadi said the company currently employed 2,300 local residents, with 64 percent hailing from the closest villages in Morosi, Kapoiola and Bandaola districts. The rest come from other Southeast Sulawesi districts. “The company needs additional human resources, as it expects to hit full production capacity in March 2018. We expect to employ 8,000 people,” he said.
Added value
Ideally, mineral smelter companies increase the mined minerals’ domestic added value. Raw minerals or mineral ore are processed and purified into metals. For decades, raw minerals were exported, an ironic situation that is called the true sell-out of local land and water.
The responsibility for increasing the added value of the minerals through downstream activities lies on the shoulders of the mining holding company.
Data at the State-Owned Enterprises Ministry shows that once nickel ore is processed into ferronickel, its price increases tenfold. The price may increase a further sixty-fold as the product is processed into stainless steel. Another example is bauxite. Its ore is priced from US$25 to $30 (Rp 400,000) per ton, which can increase to $300-$350 (Rp 4.7 million) once it is processed into aluminum oxide. If it is processed into aluminum, its price will skyrocket to around Rp 27 million per ton.
The responsibility for increasing the added value of the minerals through downstream activities lies on the shoulders of the mining holding company. State aluminum firm PT Indonesia Asahan Aluminium has been appointed as the parent company, with state tin miner PT Timah, state coal miner PT Bukit Asam and state diversified miner PT Aneka Tambang as subsidiaries. Apart from driving downstream activities, the holding company is also expected to achieve efficiency and synergy between state-owned miners. It is clear that the mining operation must help improve the welfare of the local people, instead of plunging them into poverty.
