Jakarta. Nickel processing company Gunbuster Nickel Industry (GNI) has laid off around 1,800 workers over the past year as the company grapples with mounting financial difficulties linked to the collapse of its Chinese parent group, local labor officials said.

The layoffs at GNI's smelter in North Morowali, Central Sulawesi, have reduced the company's workforce to about 6,000 employees, according to Yakanis Lakawa, head of the North Morowali Manpower and Transmigration Office.

Yakanis said the company's financial condition began deteriorating in 2025 after its original owner, Tony Zhou Yuan, returned to China amid unspecified legal and business issues.

"GNI started to collapse in 2025. When the original owner encountered problems and returned to China, the company began to falter," Yakanis told Beritasatu.com on Thursday.

GNI is majority owned by China's Jiangsu Delong Nickel Industry Co. Ltd., which holds a 99.84% stake in the Indonesian company. As Jiangsu Delong underwent restructuring following its own financial crisis, Zheshang Zhongtuo, a Chinese state-owned enterprise also known as Zheshang Development, acquired a 75% stake in the parent company's holdings.

Jiangsu Delong has been hit by falling global nickel prices and mounting debt problems in China, developments that have reportedly spilled over to GNI's operations in Indonesia.

The smelter, inaugurated by then-President Joko Widodo in 2021, represented an investment of approximately $2.7 billion and was one of the flagship projects supporting Indonesia's downstream nickel processing strategy, which aims to increase domestic value-added production for the electric vehicle battery supply chain.

According to Yakanis, layoffs accelerated after the ownership transition. The new management recognized only employees working directly at the smelter, leaving hundreds of workers assigned to affiliated companies without clear employment status. 

Company management has told local authorities that a new investor is expected to enter the business, but has required major repairs to GNI's smelter facilities before operations can resume. As a result, production has been temporarily suspended and additional workforce reductions were deemed necessary.

GNI is currently undergoing Indonesia's court-supervised Suspension of Debt Payment Obligations (PKPU) restructuring process. The company has expressed optimism that operations will resume once the restructuring is completed and has pledged to give priority to former employees when hiring resumes.

Local authorities have introduced retraining programs, including Mandarin language, welding, and electrical courses, while helping eligible workers access unemployment benefits through Indonesia's BPJS Ketenagakerjaan social security program.

The restructuring has also affected foreign employees. Around 500 foreign workers at GNI and another 200 at neighboring Nadesico Nickel Industry (NNI) were not granted extensions to their work permits and have returned to their home countries.