Nickel boosts ‘east coast’ politics in Central Sulawesi
Jiahui Zeng
On August 6, 2024, I arrived in Palu, the capital of Central Sulawesi. My plan was to transit briefly before heading to the nickel town of Morowali, 500 kilometres to the southeast. Outside the airport, a poster caught my eye: a Morowali household face, wearing a peci, smiling at new arrivals. It was Anwar Hafid, vying for the governorship, alongside his running mate, Reny Lamadjido.
For those familiar with Central Sulawesi’s political terrain, this pair was jarring. A tacit, long-standing ‘power-sharing’ arrangement that had structured all the previous elections was crumbling. The spidery geography of the central part of Sulawesi Island is key to it. Traditionally, candidates from the west coast held the provincial governorship. The regencies of Palu, Sigi, and Donggala, located in the Palu Valley in the west, comprise 31 per cent of the population. Their vice-governors came from the east coast – including the three Banggai regencies, comprising 18 per cent of the population. (Most regencies used to be small sultanates in the colonial era). Here’s what was new: Anwar was the former regent of Morowali, the easternmost regency with only 5 per cent of the provincial population, while his running mate Reny was part of the Kaili aristocracy from Palu.
Spurred by two decades of ‘nickel fever’ and the mega-project of building a new national capital in nearby Kalimantan, Central Sulawesi has transitioned rapidly from an agriculture-dominant economy to an extractive and manufacturing hub. By 2023, mining, ore processing, and construction combined contributed more than 60 per cent of provincial GDP, double their share a decade earlier. Meanwhile, agriculture dropped from 34 per cent to 16 per cent. This transition has been underpinned by the east coast. Hosting several nickel-iron industrial parks, Morowali alone contributed 44 per cent of the province’s GDP. Behind these figures lies not only a 6 per cent annual economic growth rate, but a fundamental recasting of land use, labour, and livelihood.
A week later, I was still in Palu, being showered with lavish, competitive potlatch-style campaigns. Several rock stars in a row flew up to give free concerts. The radius of nickel money had expanded from Morowali to the provincial capital. Two out of the three candidates for governor came from the same village in Morowali regency. ‘A governor’s race has essentially become a village head race,’ a friend joked. This article aims to situate this election, particularly the two candidates, within the context of Central Sulawesi’s changing political economy these past two decades. These shifts call for a new political imagination in the coming decade. Extractive industries are reshaping traditional political arrangements. Central Sulawesi is a microcosm of broader resource politics in Indonesia.
The familiar dust
My extended stay in Palu witnessed a new extractive era for Central Sulawesi: similar rush, different commodities. One day we planned a trip to visit the famous Tanjung Karang beach in Donggala, a popular weekend getaway for Palu residents, an hour’s motorbike ride away. However, the entire coastline stretching from Palu to Donggala was blanketed with heavy dust. Trucks loaded with boulders or gravel hogged the highway. Mountains were stripped bare of vegetation. Unprepared with either mask or helmet visors, dirt engulfed us. Talk ceased. We struggled to seal our mouths and noses against the gritty air. The familiar taste of dirt instantly shifted me back to Morowali. It was the unmistakable taste of an extractive frontier. Producing dirt, eating dirt, and becoming dirt. All these limestone boulders were heading for barges that would take them to East Kalimantan, where work is continuing on the new national capital, Ibu Kota Nusantara (IKN).
The scene along the Palu-Donggala road mirrored Morowali. Trucks, flagmen, barges, excavators, dust, polluted waterways, and marginalised villagers. All this equipment, all these sentiments, were ushering in a new era for the west coast. Limestone mining has escalated sharply since 2019. The permit authority for quarrying so-called ‘C-level’ material has always been held by the province, rather than the ministry in Jakarta. This has created space for local manoeuvring.
Fast-rolling mining money is like an economic opiate, particularly during election season. The geographical proximity between Central Sulawesi and East Kalimantan fortified its importance as a source of cheap, stable and nimble supplies. In March 2024, then-president Jokowi inaugurated two ports in Donggala to facilitate the delivery of construction materials for the IKN. ‘Perhaps almost all the materials (for IKN) come from here, with values reaching trillions of rupiahs. East Kalimantan builds, Central Sulawesi smiles,’ he jubilantly declared.
In reality, Central Sulawesi smiles unevenly. Jokowi framed IKN as a move from Java-centrism to Indonesia-centrism, promoting regional equity, something Indonesian development history has not seen much of. Compared to the lengthy bureaucratic process of obtaining permits for critical minerals or coal, quarrying presents much lower barriers. It attracted hundreds of local entrepreneurs. By 2024, 258 non-metal mining permits operated across hundreds of hectares. A relatively small mining area and workforce presented an ‘even’ opportunity for those with capital and political ties, but an uneven imposition on many coastal communities.
The expansion of what Paul Gellert called ‘extractive regimes,’or ‘predatory accumulation,’ functions more like electroconvulsive therapy for the addicted. Extractivism reaps huge profits based on the smooth transfer of social and ecological tolls to non-participants, so-called ‘externalities’ in the economy. The anti-mining NGO Jatam has documented several villages suffering from air and water pollution, as well as fishermen squeezed out of their livelihood as the seawater turned murky. Affected villagers had erected boldly capitalised, angry slogans along the highway. The slogan bluntly connected their everyday dust with Nusantara city: ‘IKN Damages the Lungs of the World and Palu-Donggala Community’ (IKN Merusak Paru-Paru Dunia dan Masyarakat Palu-Donggala).
We visited Buluri village, where a river was choked, thin, and weak, signs of its dying. Though Jatam tried to bring affected people together in the Palu-Donggala Petition Coalition (Koalisi Petisi Palu-Donggala), the resistance remains local and highly place-based. The goal of village-NGO collaboration is to revoke the mining permits. There are many of these, based on a patchwork of fragmented concessions. The list of companies digging up the land goes on and on. Nature will not return easily to what it was before.
Entrepreneur-politician
The 2024 gubernatorial race featured ex-governor Rusdy Mastura from Palu, and two east coast candidates: Ahmad Ali and Anwar Hafid. The latter are both products—and architects—of the east coast nickel boom.
Ali was born in 1969 in Wosu, Morowali district. He embodies many tensions between politics and business, Jakarta and province, east and west coasts. He may well be Central Sulawesi’s first oligarch-politician. In July 2024, after a series of setbacks in national politics, he returned to Palu for his third electoral campaign that year.
His father, Haji Sun, is one of only a few Chinese Indonesians settled on the east coast. Haji Sun amassed wealth through a variety of ‘broker’ businesses typical of the pre-nickel era, primarily trading in forest products and construction contracts. Renowned for his generosity and mosque donations, Haji Sun is cautiously apolitical. This is a survival strategy for this minority in an area charged with ethnic-religious frictions. He is known to be strongly opposed to Ali's political passion.
Ali, however, carefully erased any public trace of his Chinese heritage. He pursued both politics and Islam with fervor. Taking over the family business, he started as a construction contractor across the province in the 1990s. Leveraging that base, he got into nickel mining some time before 2010. Ali’s two mining companies - PT Graha Mining Utama and PT Oti Eya Abadi - together hold over 5,000 hectares of former Rio Tinto and Inco concessions.
His formal political career includes an unsuccessful bid for Morowali regent in 2012, and a successful one for the national parliament (DPR RI), where he was a member from 2014 to 2024. In 2020, he financed Rusdy’s gubernatorial bid.
Informally, he has been active since his college days in the Muslim Students Association (Himpunan Mahasiswa Islam, HMI). He serves today as head of the Central Sulawesi branch of the Indonesian Council of Mosques (Dewan Masjid Indonesia, DMI). He supported armed Islamists during the Poso conflicts that peaked in the early 2000s. He continues to support their network until today, reportedly drawing on it as a reserve army of labour and militias.
Despite never holding executive office, Ali has built a prominent political dynasty, from local to national levels. His wife Nilam Sari Lawira serves as a DPR RI member, his elder son Anugerah Pratama sits in the Palu district parliament, and his younger sister Arnila (Haji Cica) holds a seat in the Central Sulawesi provincial parliament. The scale of Ali’s political investment is elusive, but the 2024 gubernatorial campaign is believed to have been the most expensive ever in Central Sulawesi. His wealth erupted in spectacle, featuring hundreds of pilgrimage coupons (umroh), numerous concerts, and provincial tours with famous preachers (ustadz).
I think the rift between father and son transcends personal differences. It is commodity-driven. Over the last fifteen years, nickel has risen from a minor provincial mineral, extracted by scattered local mining companies, to a ‘critical mineral’ of national strategic importance. The 2009 Mining Law granted full autonomy to local government, but power over mining permits was later transferred from the local to the provincial, then to the national level. This confusion generated numerous disputes over clean and clear status, adding significant business risks and what was often called ‘regulatory uncertainty’ (see the Tempo report translated here). Coupled with potentially enormous profits, this intensified competition and political manoeuvring.
Resource regionalism
The winning candidate eventually was Anwar Hafid, the former Morowali regent. He was born in the same year as Ahmad Ali, and in the same village. Rooted in local politics for more than three decades, he cleared the way for the nickel boom and the Indonesia Morowali Industrial Park (IMIP). His authority in this period reached unprecedented heights. His direct confrontation with the UK giant Rio Tinto over mining permits was an unusual footnote in the story of Indonesia’s decentralization.
‘Resource nationalism‘ is a movement to assert national control over natural resources. It always clashes with the interests of multinational corporations. It has been a major populist force particularly in Latin America. In Indonesia, though, it has remained largely an elite discourse—focused on transferring mining rights from foreign corporations to domestic business. Most of the cases Eve Warburton documented in her book Resource nationalism in Indonesia (2023) involve transfers from transnational corporations (TNCs) to national conglomerates. In contrast, what Anwar Hafid facilitated was a shift of ownership from TNCs to more diffused, local brokers. As both an aggressive issuer of mining licences and a promoter of social welfare programs, Anwar embodied the complexities of governing a resource-rich region during a moment of rapid expansion.
He began his political career as a subdistrict head (camat) in Luwu, home to multinational miner Inco. This period may have left him feeling critical of the perceived arrogance of the TNCs. Then followed a decade as regent (bupati) in Morowali (2007 - 2018). Following his predecessor, he aggressively issued nickel mining permits, accumulating 183 mining permits since Morowali became an independent regency in 1999. Of these, 43 fell within Rio Tinto and Inco’s concession. Only a handful of these permits translated into actual mining operations. Most were political transactions between local businessmen and actors from Jakarta or China. Despite being sued by Rio Tinto in 2008 for overlapping concessions, and being criticised by Jakarta for it too, a Palu court, in a frenzy of decentralisation, awarded Anwar the case. In 2013, Rio Tinto planned to terminate all its Sulawesi business and leave Indonesia, lamenting the worsening investment environment. Anwar Hafid was at the same time using the money to pilot some popular redistribution programs, like free health and education including college.
In response to Tempo’s investigations into concession overlaps, and into Ali’s business dealings (see above), Anwar dismissed the criticism. He emphasised instead the importance of local control over resources. He praised Ali and others as true ‘local sons’ (putra daerah). The meaning of this term is contextually malleable, but here it meant someone who chooses the opposite side to Jakarta. He invoked this term not to advocate local justice or redistribution, but to naturalise the idea that Sulawesi’s resources should be managed by Sulawesi’s elites. He was taking a step further, from ‘resource nationalism’ to ‘resource regionalism.’ ‘In Morowali,’ he argued, ‘there are many large nickel companies. Why don’t you (the media) focus on them? Haji Karlan’s mine is minimal. Ali’s family might manage his business. But I am proud (bangga) that they are there.’
The politics of wealth distribution
Faced with increasing intervention from Jakarta in the name of re-centralisation and better governance, anxiety about retaining nickel wealth locally intensified in Central Sulawesi’s new extractive era. Though the nickel cake continued to grow larger, the slice for Sulawesi was slimming down. Activist-scholar Arianto Sangaji estimates that more than 95 per cent of the added value from Sulawesi leaves the region, ‘investors from China, vendors from Java’ reaped the largest share. Both Ali and Anwar, sons of Morowali from business and politics, have been troubled by this tension. The ‘east coast problem’ - how to manage and distribute rapid resource wealth - now haunts the whole province. I read this as the deeper reason behind the rise of two east coast candidates.
Nickel not only brings wealth for a certain class, but also generates new political imaginations. Before the election, an activist friend explained his support for Ali, saying, ‘he could oppose Jakarta for us’. I was bewildered, and still am today. Who is ‘Jakarta’? Who is ‘us’? How to oppose ‘Jakarta’ if one is from Jakarta? The hope invested in Ali is not so much about what he will do. Amid the sprouting anger over unjust distribution between periphery and centre, it is a call for a fighter, while leaving open the question of how an oligarchic local miner like Ali could really be a fighter for redistribution.
The classic question of Indonesian politics is ‘sharing the goods’ (bagi hasil). This question has now been inflicted on the provincial elites too. Is it possible to imagine a politics of distribution just as production volumes are ramping up to unprecedented heights? How to turn economic growth into real social welfare? Welfare for whom? Could Anwar Hafid’s ‘free’ programs pave the way for a politics of distribution in a resource-rich province? Central Sulawesi needs to inject their politics with a long-term vision. Unless it does, it may be left with nothing once the impending depletion arrives.
Jiahui Zeng (jiahuizeng@outlook.com) is a PhD candidate at the Department of Sociology and Institute for International and Area Studies, Tsinghua University, China.
