Indonesia's Attorney General's Office seized Rp11.795 billion (about $657,000) in cash during searches tied to an investigation into alleged corruption in nickel mining in Southeast Sulawesi, and named a mining company as a corporate suspect, officials said on Tuesday, Nov. 10.

The case reaches into the supply chain that feeds Indonesia's smelters. Indonesia is the world's largest nickel producer, and the companies under scrutiny are linked to Arif Kurniawan, a trader whose businesses controlled about a third of the country's domestic nickel ore trade in 2024, according to a Bloomberg estimate cited by Indonesia Business Post. For investors in Chinese stainless steel makers, battery material producers and listed Indonesian miners, enforcement that disrupts ore flows from Sulawesi is a supply risk on top of the government's tighter mining quotas.

Attorney General targets PT BSJ and five other nickel companies

The investigation covers nickel mining governance in Southeast Sulawesi from 2013 to 2025, according to Anang Supriatna, head of the Attorney General's Legal Information Center. Investigators from the special crimes division, working with a digital forensics team, searched a house in Cilandak, South Jakarta, and offices in the Central Park area and the Sudirman Central Business District, as well as an office in North Konawe Regency, Indonesia Business Post reported.

The cash was found in suitcases and bags at an office: one batch of Rp11.2 billion and a second of Rp595 million. Investigators also took corporate documents, phones, laptops and servers.

Prosecutors named PT BSJ a corporate suspect. They allege the company kept mining after its mining business licence lapsed, operated in protected forest and sold nickel taken from outside its licensed area. "PT BSJ continued nickel mining activities even though its licence had expired in 2014," Anang said. Investigators also suspect payments to officials to avoid checks of mining documents and to influence approvals of the annual work plans, known as RKAB, that set how much ore a company may mine. State losses are still being calculated by auditors.

The probe extends to six companies said to be controlled by Arif: PT BSJ, PT KA, PT ANI, PT AMI, PT AMIT and PT HJ. Saiful Bahri, the office's investigation director for special crimes, said immigration records showed Arif was overseas and that prosecutors were working with immigration authorities to locate him. Arif is a witness and has not been named a suspect. The office has questioned 38 witnesses.

Indonesia Business Post's two reports on the case give different dates for parts of the searches, Nov. 5 in one and Nov. 9 in the other. Capital Times could not establish the full sequence.

A former Glencore trader at the center of the ore trade

Arif began his career at Glencore's Jakarta office in the early 2000s, trading coal and then nickel, and founded PT Dua Delapan Resources in 2015, which set up a nickel trading unit in 2018, according to Indonesia Business Post. He and partner Edi Liu Amas reportedly hold interests in at least 20 concessions covering more than 71,000 hectares, and he has supplied ore to smelters run by Jiangsu Delong Nickel Industry in Sulawesi.

The criminal case runs alongside a separate action by the Forest Area Enforcement Task Force, known as Satgas PKH, which began taking control of land linked to Arif on Nov. 4, citing irregular mining, licensing and forest use. That announcement drove Shanghai nickel futures to their biggest one-day gain since January on Nov. 5.

Jakarta tightens its grip on nickel supply

The investigation adds to a series of moves by Jakarta to rein in output. At the Minerba Convex industry conference in Jakarta on Nov. 2, Energy and Mineral Resources Minister Bahlil Lahadalia said the ministry would study whether to allow new smelters that make only semi-finished products, the Jakarta Globe reported. "Why are prices falling? Because our production is out of control," he said.

He put global nickel demand at about 3.5 million tons a year against an oversupply of nearly 800,000 tons, according to the report. Indonesia's nickel export value rose to $33.9 billion in 2024 from about $3.3 billion a year in 2017 to 2019, ministry data cited by the Jakarta Globe showed, a jump driven by the 2020 ban on raw ore exports. The government has also said it will consider the surplus when it sets ore quotas for 2027.

Prosecutors have not said how much ore the companies under investigation produced or sold, and Capital Times could not establish whether any smelter supply has been interrupted. The next step to watch is the auditors' estimate of state losses, which will set the size of the case against PT BSJ, and whether prosecutors name individual suspects.