Indonesia produces 48.8% of the world’s nickel, a quantity expected to grow further as demand for electric vehicles increases. With rising demand, companies are turning to lower-grade laterite nickel which must be processed into higher-quality, battery grade nickel, a process which can produce as much as twice the carbon emissions of the industry average. While electric vehicles are a necessary piece of solving the climate crisis, the nickel industry must improve extractive and processing practices to protect the people and biodiversity of Indonesia.
Links to Deforestation and Biodiversity Destruction
In an analysis of 329 nickel mining concessions, Mighty Earth found associated operations have driven up to 378,970 acres of deforestation in Indonesia since 2000. Of the top nickel deforesters, many are clearing land in High Carbon Stock forest and Key Biodiversity Areas, and over 1.2 million acres of forest are at risk inside nickel concessions in Indonesia. Sulawesi, a biodiversity hotspot, contains 3.7 million acres of forested, mineral-rich land and 36% of these acres are occupied by nickel concessions. As mines operate in ecologically valuable rainforest and easily disrupted island ecosystems, nickel mining poses significant biodiversity risks to Indonesia, which would impact its forests’ ability to act as a carbon sink.
Increased Emissions & Captive Coal
Mining and refining yields high emissions due to fossil fuel use and land use change. Because Indonesian laterite nickel ore is low-quality, processing it into battery grade nickel is carbon intensive, with roughly two to five times more emissions than processing sulfide nickel ore mined in temperate countries, like Canada and Russia.
Nickel industrial parks are largely dependent on captive coal, meaning coal is burned solely to feed industrial operations and does not connect to the country’s electricity grid. As more nickel smelting facilities are built, more captive coal plants are being built in Indonesia. Continued use of captive coal plants in nickel mining will lead to Indonesia’s ranking as one of the world’s biggest emitters. Coal consumption in Indonesia increased 33% from 2021 to 2022, contributing to a 20.3% increase in the country’s greenhouse gas emissions in just one year. The Indonesia Morowali Industrial Park alone has as much coal power capacity as Pakistan or Mexico. Environmental groups are advocating for the early retirement of coal-fired power plants in Indonesia, including captive coal plants, in order to mitigate climate impacts.
Toxic Waste and Harms to Communities
The Indonesian nickel industry is increasingly turning to High Pressure Acid Leaching (HPAL), a toxic process that leaves behind a massive amount of waste. In some cases, this waste is dumped directly into rivers, lakes, and oceans, through a process known as submarine tailings disposal. Toxic runoff from mining and smelting operations contaminates drinking water for communities who rely on nearby aquifers and rivers. In Sulawesi, water pollution from the Indonesia Morowali Industrial Park reduces available fish, impacting the community’s livelihoods. On Halmahera Island, drinking water for local communities is threatened by excessive pollution from companies like PT Weda Bay Nickel. While Indonesian environmental laws should protect against pollution of this sort, Climate Rights International highlights that the laws lack sufficient enforcement while the national government prioritizes industrial development over environmental protection. The Indonesian government is currently barring nickel companies from dumping waste into the sea, but their on-land storage alternative may not be safer.
Tailings facilities are used to house leftover waste from the mining process. If tailings are not stored properly, facility failures can be catastrophic, exemplified by a 2019 mine tailings dam collapse in Brazil which killed 272 people. At these facilities, pollution and dust increase health risks, such as tuberculosis and respiratory infections, in nearby communities. In 2022, coal-fired power plants in Indonesia were responsible for 10,500 deaths and $7.4 billion USD in health costs.
Ongoing Violations of Indigenous Peoples’ Rights
Nickel mining and refining in Indonesia poses significant threats to the rights of Indigenous Peoples, including the right to provide Free, Prior, and Informed Consent (FPIC). For example, the Hongana Manyawa, an uncontacted tribe, is threatened by nickel mining as their customary territory was non-consensually granted by the Indonesian government to mining companies who are encroaching on their land. The traditional livelihood of the Hongana Manyawa tribe is dependent on the forest, and any contact from outsiders threatens their health and safety due to the risk of violence and a lack of common immunity from disease.
Future of Nickel Mining in Indonesia
The Indonesian nickel mining industry threatens land and people via economic incentives that drive deforestation, systemic corruption, and legal amnesty for problematic mining practices in protected forest areas. Moreover, the Indonesian nickel industry currently operates without traceability and transparency; there is no production data or traceability for individual mines or standards for producer disclosure.
Environmental groups and US government officials are pushing for strong social, environmental and labor protections in the Indonesian nickel mining industry. In October 2023, a bipartisan letter from U.S. Senators warned against a potential critical minerals agreement (CMA) with Indonesia, citing concerns over labor and community protections, biodiversity impacts, and CO2 emissions. Indonesian civil society groups 二 US NGOs also released letters expressing concerns about a CMA, pushing for binding environmental and social safeguards in any agreement to expand access to nickel or other critical minerals.
Guidelines and standards, such as the Initiative for Responsible Mining Assurance, exist to help mines adopt best practices. Transport & Environment recommends dedicated biodiversity conservation practices, in addition to dry stacking as a form of tailings management. Earthworks’ “Safety First: Guidelines for Responsible Mine Tailings Management” include recommendations that ban dangerous tailings facilities, bolster safety regulations and adopt comprehensive evacuation and emergency plans.
Climate Rights International’s “Nickel Unearthed” report documents human rights and environmental abuses related to nickel mining and smelting in North Maluku, and provides recommendations, focused on protecting the environment, climate, and human rights, to mining and smelting companies, the Indonesian government, EV companies, and foreign governments.
The Indonesian government and companies sourcing Indonesian nickel must ensure that people, forests, biodiversity, and the climate are not devastated by harmful mining and processing practices.