As PT Ceria Nugraha Indotama (CNI) prepares to launch commercial operations of its upgraded nickel smelter this April 20205, environmental activists are raising concerns over the company's past record and the potential ecological impact of its activities in Kolaka, Southeast Sulawesi.

Andi Rahman Tusa, Head of the Southeast Sulawesi chapter of the Indonesian Environmental Forum (Walhi), said that the Forum has received multiple reports indicating possible environmental violations linked to CNI, including water pollution and social tension in local communities.

“While Walhi hasn’t conducted a direct investigation into CNI’s operations, we’ve received alarming reports from our field partners,” Andi spoke to Indonesia Business Post on Monday, April 14, 2025.

“There were incidents during the smelter construction phase suggesting possible contamination near community areas,” he cited.

One notable incident occurred in May 2023, when five villages in Kolaka were flooded after a dam owned by the company reportedly collapsed.

“It wasn’t a large dam, but a check dam meant to hold water. During heavy rainfall, it gave way, causing downstream rice fields in villages like Pesauha and Totobu to be submerged,”Andi said.

While CNI's smelter project is part of Indonesia’s National Strategic Projects (PSN), environmental advocates warn that such classification often comes with reduced scrutiny.

“Once a project is backed by major state-owned banks like Bank Mandiri, and labeled as strategic, it tends to be politically protected,” Andi said.

He added that Walhi’s lab testing in nearby areas also detected hazardous substances, including hexavalent chromium − a known carcinogen − in rivers connected to other mining sites, including Vale’s.

“These rivers pass through multiple mining zones − CNI, BMS, and several local miners. So the cumulative effect is real,” he said.

Ceria Group, an Indonesian nickel mining and processing company, in its official statement said the smelter is nearing commercial production at its ‘Merah Putih’ Smelter in Wolo, Kolaka, Southeast Sulawesi.

National strategic project

Roimon Barus, General Manager of RKEF Operation Readiness at Ceria Group, said using advanced Rectangular Rotary Kiln Electric Furnace (RKEF) technology, the smelter is part of Indonesia’s National Strategic Projects and a designated National Vital Object. The first Ferronickel (FeNi) production is expected soon, following hot commissioning in February 2025.

The 72 MVA RKEF system emphasizes high energy efficiency and low emissions, supported by dust collectors, digital emission monitoring, and waste management systems. The smelter operates on renewable energy certified by Renewable Energy Certificates (RECs), reducing its carbon footprint in line with national decarbonization targets.

In the future, Ceria plans to expand its smelter capacity to four RKEF lines and develop facilities for Nickel Matte, Nickel Sulphate, and Mixed Hydroxide Precipitate (MHP) via High Pressure Acid Leach (HPAL) technology to support the electric vehicle (EV) battery supply chain.