Muhamad Al Azhari

Since Tuesday, about 500 villagers have blocked access to a road at Inco’s Sorowako mine. (Reuters Photo)

Angry Villagers Block Access At Inco’s Mine in South Sulawesi

PT International Nickel Indonesia, the country’s largest producer of the metal, said its nickel mining operation in Sorowako, South Sulawesi, had not been affected by protests by villagers, who are blocking a key road to the mine in response to planned job cuts.

The company, known as Inco, last month announced plans to cut 87 jobs out of a total of 3,400 as part of its restructuring plans this year, although sources from the company have said that the number would likely reach between 500 and 600 jobs by the end of 2009.

According to Reuters data, Inco produced 72,400 tons of matte nickel in 2008, or about 5 percent of world output, but has suffered slow sales due to falling global demand for stainless steel, which affects nickel, a key raw material.

The retrenchment plan has sparked an angry response from the villagers, many of whom either work at the mine or who have family members who do. Inco has said the job cuts would affect some workers near retirement age, along with expatriate staff.

Since Tuesday, about 500 villagers have blocked access to a key road that connects Inco’s management facilities to employee housing areas. The villagers have demanded to meet with Inco’s board of directors.

Apart from wanting more information about the job cuts, the villagers also wanted assurances that the firm would meet its promises on health care, infrastructure and educational programs in the area near the mine, as part of its corporate social responsibility efforts.

Janus Siahaan, Inco’s communications director, told the Jakarta Globe by telephone that the protests had not disrupted the day-to-day operations of the mine.

“Workers are not striking or demonstrating — the protesters are local villagers who are relatives of employees who work here,” he said. “Production and operations have not been disrupted. The police have been standing by to prevent the protests from turning into anarchy. Since Tuesday, they’ve blocked a main road that provides access to management’s living quarters. They wanted to meet management, and we fulfilled their request.”

Talks took place on Thursday, with the company promising to meet its CSR requirements. However, there was no progress in the discussions on the layoffs, according to Andi Duding, the head of the Sorowako Indigenous Group (KWAS), which represents the residents. Talks with the company were set to begin again on Monday, he said.

Andi said that before laying off the workers, the company should have first considered the welfare of the mine’s primary dependents — the people who live in the area.

“This is a key issue, because it will affect the lives of many people here,” he said. “We have no farming land anymore, because all of the land around here has been acquired by Inco, so how will we live? We depend on our income from the company.”

On July 14, the Jakarta Globe, quoting Inco sources, reported that the company was planning to eliminate 500 jobs this year, although a company representative denied this. Later, another source from the company said that layoffs would affect between 500 and 600 workers.

“I think they are heading to [more layoffs], although at the meeting there was no confirmation,” Andi said.

Janus said that the staff reductions were part of Inco’s restructuring program to keep it competitive in the long term, adding that Vale, Inco’s Brazil-based parent company, had ordered the restructuring.

Inco’s shares rose 5.76 percent on Thursday to close at Rp 5,050.

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