How Indonesia’s Soaring Iron Exports to China Create Higher Tsunami Risks, Threaten Food Security in Local Village

In a small village on Indonesia’s Sumatra island that stares at the vastness of the Indian Ocean, tsunamis may come at any given moment. The village’s beautiful coastlines, rich with nature reserves of mangroves and corals, guard it against the disaster. But now, residents worry the coastlines will be destroyed as mining companies begin taking away their iron-rich sand.

On a hot sunny day in March, Resda led me to the beach of Pasar Seluma village in Seluma Regency, Bengkulu Province. Wearing a long, beige hijab over a flowery print dress, the 60-year-old member of Bengkulu’s Serawai indigenous people walked through the palm oil plantation with agility and steady pace. Despite the 32-degree-celsius heat, sweat was absent from Resda’s face. 

“Look at these black sands,” said Resda. She cupped her hands to hold the sand. It glowed under the bright sun. “This is what they are looking for in our village.”

---

As a nonprofit journalism organization, we depend on your support to fund more than 170 reporting projects every year on critical global and local issues. Donate any amount today to become a Pulitzer Center Champion and receive exclusive benefits!

---

Known as iron sand, Pasar Seluma’s dark sand is sought after because it contains silica, calcium, titanium, and vanadium, which can be processed into iron ore.

Just a few hundreds meters from where Resda and I stood was an iron sand mining complex. Faminglevto Baktiabadi, the company that owns the complex, exports iron-rich sand from Pasar Seluma to China. 

In the middle of Faminglevto Baktiabadi’s site was a huge refinery machine. There was a canal connected to the ocean that flowed to the complex, which is used to pump out the sand before being refined into iron ore. 

“[The sand] is a blessing for us, but also the source of disaster,” said Resda, who is also a farmer and an artisanal fisher for her community. She looked more angry than sad as she threw a piercing glance into the ocean.

China has for the last ten years maintained the top spot as Indonesia’s iron export destination. Data from Indonesia’s Central Statistics Agency showed that China’s demand for iron has only ballooned, from just 338,000 tons in 2012 to a whopping 8.3 million tons in 2022.

In the first eight months of last year amid the fall of Indonesia’s total exports, the country’s exports to China climbed defyingly. Exports to China were the only increase recorded among 13 other main destinations. Iron and steel dominated Indonesia’s non-oil and gas exports to China at nearly 30% in that period. 

Bengkulu, the province where Resda’s village is located, is a significant supplier of iron sand, exporting most of its products to China and Taiwan. Between 2012 and 2022, Bengkulu sent over 146,000 tons of iron sand, according to WALHI, an Indonesian environmental watchdog.

Bengkulu lies near the Sunda megathrust in the Indian Ocean and is vulnerable to earthquakes and tsunamis, recording around 200 earthquakes in October 2023 alone. 

In the wake of the 2004 Indian Ocean earthquake and tsunami that killed more than 200,000 people in the region — mostly in Aceh, the province on northwest tip of the Sumatra island — the Indonesian government has poured more efforts in disaster preparedness, including by installing early warning systems. One of these efforts is run in Pasar Seluma. 

But residents of Pasar Seluma are getting increasingly worried. They have reported that in the past decade coastal abrasion has worsened, with dozens of hectares of farmland submerged underwater and that seawater intrusion has caused crop failures in recent years. 

“It’s getting harder to survive,” Muhammad Taufik, a 64-year-old farmer, told CGSP. “Crops failed as fresh water turned brackish. Some of us have lost our ancestral farmland.” 

Protecting Coastlines, Protesting Exploitation

Pasar Seluma village has a total land of less than 3,000 hectares and is surrounded by protected forests and palm oil plantations. Activists and residents have blamed mining concessions and deforestation by palm oil plantations as the main causes of the eroding coastlines. They feared that iron sand mining would further degrade the environment and their livelihood, making them more vulnerable to natural disasters. 

“Many of residents’ farmland have been lost due to abrasion,” said Resda, the fisherwoman. “I lost my palm oil plantation, now my rice paddy field is threatened.”

Two mining companies have attempted to exploit Pasar Seluma in the past fourteen years. The first company, Famio Terdio Nagara, came to the village in 2010 without consulting the locals. After intense protests and struggles against the authorities by the residents, the company finally stopped operating in the area.

The victory of the Serawai indigenous community, however, was short-lived. Another company, called Faminglevto Baktiabadi, came to the village to mine iron sand in 2018. Similar to its predecessor, Faminglevto Baktiabadi did not notify residents nor the village administration office.

“They suddenly set up camps on the coast,” said Rustam, a 60-year-old farmer and fisherman. “They didn’t meet with us to have dialogue, let alone show us any documents, permits, or the [environmental impact analysis documents].” 

Faminglevto Baktiabadi’s site is located some six kilometers from the community settlement. The company secured a mining permit in October 2010 and became fully operational in 2020. Its facilities pump out sand, then feed it into heavy machinery to separate the iron ore from the sea sand. 

The following year, residents of Pasar Seluma village began protesting again. They occupied the mining site by setting up tents in peaceful demonstrations for five days, demanding the company to stop its operation. 

Police used excessive force to disperse the crowd, arresting ten women for interrogation. The women were later released.

Some of Faminglevto Baktiabadi’s activities were illegal. A geospatial analysis conducted by WALHI Bengkulu in 2021 revealed that the mining concession of Faminglevto Baktiabadi overlaps with a conservation forest of about four hectares. 

“Once [conservation area] is lost for mining and plantation, we know it’s too late.”

Abdullah Ibrahim Ritonga, WALHI Bengkulu director

WALHI Bengkulu director Abdullah Ibrahim Ritonga said that conservation forests, particularly along the coast of Pasar Seluma village, have an important role as a natural barrier to protect the village from natural disasters. Exploiting the area for extractive industries will bring irreversible damage. 

“In the era of rising sea level due to climate change, conservation area is very important,” said Ritonga. “It’s like a support system for biodiversity and the community. Once it is lost for mining and plantation, we know it’s too late.”

Several farmers in Pasar Seluma told CGSP that Faminglevto Baktiabadi also dumped their post-refinery sand back to the tributary. This act caused built-up sedimentation in the riverbed, disrupting natural water flow and causing flooding.

Taufik, the local farmer who owns a few hectares of rice paddy field near the Pasar Seluma river, said he has experienced crop failure several times. He believed that it was a result of the river overflowing his field caused by the dumping sand practice.

“Our rice production was disrupted and declining,” said Taufik, frustrated. “We are threatened by abrasion and now our food stock is decreasing due to iron sand mining. Then what are we going to eat?”

The Critical Minerals Dream

Indonesian President Joko “Jokowi” Widodo has declared his ambition to keep most, if not all, critical minerals within the country’s borders in an attempt to capture their added value for exports. To achieve the goal, Jokowi banned the export of raw ores, and ordered mining companies to process their products domestically. 

Nickel, of which the processing industry is geared towards electric vehicle batteries, was banned for exports in 2020. Iron ore’s ban came later in 2023.

“Not all mineral commodities can be 'downstreamed'.”

Bhima Yudhistira, director of Center for Economic and Law Studies

Bhima Yudhistira, director of the Center for Economic and Law Studies, believed that Indonesia’s plan to build the iron’s downstream industry needs to be reevaluated. It is not an easy task. Investments in the sector are expensive and Indonesia’s refining technology is still far behind others, he said.

“The infrastructure is lacking … Not all mineral commodities can be ‘downstreamed’,” said Yudhistira. 

He also pointed out to the fact that Indonesia still imports steel from other countries to fulfill its domestic market, including iron and steel from Brazil. Yudhistira thinks that Indonesia should focus instead on fulfilling its domestic demand.

“We also need to count the environmental and social impacts. Land grabbings, loss of livelihood … we need to take these into account,” he added. “Is it worth it to push for downstreaming?”

In 2021, the Energy and Mineral Resources Ministry published a detailed handbook on Indonesia’s iron industry infrastructure, hoping to lure investments. Indonesia has 2.9 billion tons of iron ore reserves or about 1,7% of global reserves, with annual iron sand production amounting to 16.6 million tons, the handbook said.

It also stated that the government is currently pushing industry actors to build smelters to process iron ore across Indonesia. As of last year, six iron smelters have operated across the country. 

One of these iron smelters is Rusan Sejahtera in Kaur Regency, Bengkulu, which began shipping its refined iron to China in 2018, amounting to 20,000 tons in its first shipment. According to CGSP’s investigations, Rusan Sejahtera has ties to the iron sand mining company Faminglevto Baktiabadi in Seluma. Both Faminglevto Baktiabadi and Rusan Sejahtera listed an individual named Lucyana Sutoyo as director. 

Back in Seluma, a recent investigation found that Faminglevto Baktiabadi has yet to secure the necessary operating documents, leading to a temporary halt by the authorities. Despite the violation, the company’s permit has not been revoked. 

The residents are not happy. In January 2024, they held a demonstration demanding the government to permanently revoke the company’s permit. 

“We will fight until our last breath,” said Nevi Anggraeni, a 33-year-old farmer. “Until the company leaves this village.”

The Serawai indigenous group settled in Pasar Seluma long before the village administration was established in the late 19th century, according to the Indigenous Territory Registration Agency. Less than 400 families currently live there.

For generations, the Serawai people have been relying on farming and fishing. They grow rice, vegetables, and fruits, while also catching corbicula — a type of brackish water clams that the locals called remis, which in Bengkulu province can only be found in Pasar Seluma waters. It is a very unique dish, that the regional government designated remis as a special cuisine of Seluma and promoted it at the national level. 

Serawai fishers like Resda usually catch remis during low tide. On a good day, she could catch thousands of remis for six hours, which she sold for IDR50,000 ($3) per 100 clams. 

But since 2010, when the first iron sand mining company came to exploit the coastal areas, the catch has declined considerably. The water has been polluted due to mining and deforestation activities upstream. 

“We sell remis to raise our children until they have their own income and start their own families. But today it’s getting hard [to catch remis], because their ecosystem has been disrupted,” Resda said.

For fisherfolk and farmers in Pasar Seluma village, iron sand mining will only cause desperation and misery. Before the company came, Rustam, the local farmer, said the village was prosperous and self-sufficient. Everything was abundant back then, he said. 

“I am not [thinking] about myself,” said Rustam. “I’m now old, so maybe I don’t have much time left … but what about our children? Where are they going to go when our land perishes?”