The billion dollar nickel refinery located in Konawa, southeastern Indonesia, began operations in February last year with a theoretical capacity of 800,000 tonnes of ore to produce nickel pig iron with a nickel grade between 10% and 12%.
As a result of a protest, during which 800 workers demanded higher wages on Monday, protesters burned 40 cars and some production and administrative buildings of the plant.
“The turmoil left the company paralyzed as the plant's auxiliary equipment was badly damaged,” said PT VDNI, a subsidiary of China's Jiangsu Delong Nickel Industry, in a statement.
According to Ferri Valintukan, a police spokesman for Southeast Sulawesi, there were no casualties during the protest, five protesters were arrested.
“The government asks all parties ... not to aggravate the situation in order to maintain a cool investment climate in Konawe Regency,” said Industry Minister Agus Gumivang Kartasasmita.
Nickel prices on the Shanghai Futures Exchange fell from a 14-month high of 134,180 yuan a tonne reached earlier in the session, driven in part by supply concerns over the unrest at the plant, and fell 1.4% to 129,370 yuan per ton by closing Wednesday.
Indonesia was the largest exporter of nickel ore until it stopped exporting in January in an effort to attract foreign investment to develop its nickel processing industry.