Fathin Ungku, Bernadette Christina, Singapore/Jakarta – Violent protests by hundreds of workers at one of Indonesia's biggest nickel smelters on Sulawesi island operated by PT Virtue Dragon Nickel Industry (PT VDNI) had "paralysed" its activities, the China-backed company said in a statement.
The protest, which saw 800 workers calling for higher salaries and permanent employment for contractors, turned violent on Monday, as workers torched vehicles and buildings.
"The rioting resulted in company activities being paralysed because the factory supporting equipment was badly damaged and about 40 heavy equipment and operational vehicles belonging to the company caught fire," PT VDNI, a unit of China's Jiangsu Delong Nickel Industry, said in a statement late on Tuesday.
PT VDNI could not immediately be reached for further comment on Wednesday.
The billion-dollar nickel refining facility, located in Konawe, Southeast Sulawesi, started operations last February with an input capacity of 800,000 tonnes of ore to produce nickel pig iron with 10%-12% nickel content.
There were no casualties in the protest and five protesters had been arrested, Ferry Walintukan, a Southeast Sulawesi police spokesman, said.
Shanghai Futures Exchange nickel prices slipped from a 14-month high of 134,180 yuan a tonne hit earlier in the session, partly fuelled by supply worries caused by the unrest at the plant, to fall 1.4% to 129,370 yuan a tonne at Wednesday's close.
Indonesia was the largest nickel ore exporter until it stopped exports in January as it tries to woo foreign investment to build its nickel processing industry.
"Currently, the government is working hard to bring investment into Indonesia that can provide jobs and business for the community," ministry of industry, Agus Gumiwang Kartasasmita said in a statement late on Tuesday on the protest.
"The government asks all parties... not to make things worse, in order to maintain a cool investment climate in Konawe Regency," Agus said.
Indonesia wants to expand as a nickel processing hub, starting from steel, to extracting battery grade chemicals from the ore, and eventually producing batteries for electric vehicles (EVs) and building EVs.
[Additional reporting by Mai Nguyen; Editing by Ed Davies.]