The Kawasi people of Indonesia’s Obi Islands have long been fishing for tuna, snapper and grouper, and growing coconut trees, cashew nuts and cloves. But some village residents say their land and water have been destroyed and the quality of life has plummeted in the years since Harita Nickel, the $5 billion arm of Indonesian conglomerate Harita Group, began mining. , refine and process nickel in your backyard.
“We lost our plantation lands to cultivate for our survival and that of future generations. We lost the right to express our opinions. The water has become cloudy and white foam is coming out of the pipes. We see that the fish are dying. Residents are now being monitored for skin diseases, coughs and eye pain,” according to Nurhayati Jumadi, 36, a mother of two and a lifelong resident of the Kawasi village of about 4,500 people.
Indonesia is home to one of the world’s largest nickel reserves, a critical ingredient in the electric vehicle (EV) supply chain and a crucial element in the country’s quest to become an indispensable supplier. The archipelago nation has cornered the nickel market, supplying 40 percent of the world’s nickel, a figure that could rise to 75 percent by 2030. Now, the Indonesian government has set an ambitious goal of producing 600,000 electric vehicles for 2030 and by 2027, require electric vehicles and related components produced in Indonesia to have 60 percent local content. “The government has captured the public imagination in its quest to become an electric vehicle giant,” says Putra Adhiguna, managing director of the Energy Shift Institute, a think tank focused on Asia’s green transition.
In recent years, Chinese technological know-how and money have helped Indonesia build high-pressure acid leaching (HPAL) plants, once considered too risky and expensive, that use high temperatures to extract nickel from low-grade ores. law that abound in Indonesia to process it into material suitable for electric vehicle batteries. More than half of Indonesia’s $30 billion in nickel investments will be channeled into foreign-backed HPAL refineries as the world runs out of high-quality minerals needed for the green transition.
But experts and activists are sounding the alarm about the rapid pace at which HPAL plants are being developed and the human and environmental risks they pose. Indonesia has reached a critical juncture in its nickel rush where HPAL could become a game changer, allowing it to move up the nickel value chain and entrench its global dominance of the metal, or become a major obstacle in its electric vehicle ambitions. “HPAL is the second stage of nickel development in Indonesia. It is proof of the just energy transition of Indonesia and the world,” says Adhiguna.
The approval, construction and commissioning of Indonesia’s 10 HPAL plants (three in operation and seven in development) “were carried out in record time,” according to energy consultancy Wood Mackenzie. HPAL’s unprecedented coal-powered expansion in Indonesia “is a giant leap into the unknown. Normally in mining we are very cautious. We move forward gradually and learn from past mistakes,” says Steven Emerman, a professor of geology and mining consultant who studies the environmental footprint of mining.
Tailings and faults
HPAL’s biggest risk lies in the huge amount of waste it produces and the difficulties in disposing of it due to Indonesia’s topography. The country’s HPAL plants are located in some of the most remote and most biodiverse parts of its archipelago, where heavy rainfall, flooding and seismic activity are common. Nickel produced through HPAL generates between 1.4 and 1.6 tons of waste known as tailings. The country’s current and planned HPAL facilities will produce tons of toxic waste, according to Emerman’s calculations. He says: “HPAL plants have not yet been provided at this type of scale… with this amount of mine waste footprint, rainfall and seismic risk.”
Mining companies promote “dry stacking” (filtering water from tailings so they can be stored compactly) as the best waste management method in Indonesia. Emerman calls dry stacking in the country a “considerable technological challenge” given the difficulties in filtering water from HPAL waste, which can be resaturated by heavy rains. HPAL’s accumulation of wet, fine-grained waste makes it very prone to collapse, which risks spreading toxic waste throughout communities. “I’m concerned that the government and companies don’t care where they put these waste facilities, if they’re upstream from communities full of houses, mosques and schools,” Emerman says.
Some residents of villages on #Indonesia’s Obi Islands say their land and water have been destroyed since #HaritaNickel, the $5 billion arm of Indonesian conglomerate #HaritaGroup, began mining, refining and processing #nickel there. .
Locals in North Sumatra in Indonesia say waste from an Indonesian-Chinese zinc mine severely polluted an adjacent river and contributed to flash floods that swept away farmland and killed six people. In 2019, Brazil’s Vale, which is building two HPAL plants in partnership with China’s Zhejiang Huayou Cobalt and American automaker Ford, saw one of its tailings dams collapse in southeastern Brazil, killing 290 people.
However, mining waste must be spread very finely to mitigate the risk of tailings dam collapse. This “destroy[s] the maximum amount of forest,” says Emerman. In the Weda Bay Industrial Park (IWIP) alone, one of Indonesia’s largest nickel processing centers, companies have legally razed 5,331 hectares of rainforest that stored more than two metric tons of carbon.
Maximum forward speed
The government has called Indonesia’s nickel industry critical to the country’s economic prosperity. But its nickel sector has a bleak history of human and environmental damage, a trend that locals and activists worry HPAL could continue. “Indonesia has been able to develop nickel at any cost, and the market doesn’t… penalize anything,” Adhiguna says.
In Kawasi, Harita Nickel has been operating nickel smelters in the village. In 2021, the company, backed by China’s Lygend Resources & Technology, built Indonesia’s first HPAL refinery in Kawasi. Harita’s second plant, which will come online mid-year, will double its HPAL nickel production to 120,000 tonnes, which will translate into tonnes of mine waste. A response to a request for comment from the Harita Group was not received in time for publication.
Dominggus Yohanis, a 50-year-old Kawasi resident, worked for Harita for five years transporting high-level staff and important guests, such as government officials, to and from the plant. But he has been fighting the company for much longer. Yohanis, owner of 37 hectares of Kawasi land, says Harita has been using his land, without any compensation, since 2014. One of his coconut plantations was destroyed after becoming submerged in waste from the plant. Harita. “Most of the villagers who got everything for free, such as water, food and fish, which was a source of income, now have to pay thanks to mining companies,” says Imam Shofwan, head of research at the Indonesian environmental organization JATAM.
Indonesia’s HPAL is still in an early stage. “We still don’t know where their waste is going and whether the tailings are being managed properly,” says Krista Shennum, a mining researcher for the nonprofit Climate Rights International (CRI). But what is clear is that “huge facilities are being built rapidly with very little information available to surrounding communities,” weakening Indonesia’s environmental impact assessments and the ability of local communities to defend their rights, she says.
There has been evidence of improper waste disposal. Last year, satellite video showed an unidentified nickel smelter dumping its waste into the sea, which villagers said turned the seawater brownish yellow and contaminated fish. The Indonesian government banned the dumping of tailings in deep waters in 2021 for fear of ocean pollution. “But even without permission, they already removed [of] waste there and damaged the ocean,” says Shofwan.
Local officials have few incentives and resources to help because of nickel’s national strategic importance, Shofwan says. Yohanis was arrested in 2015 after blocking roads to prevent Harita from using his land. Local officials, the police and the military intimidated him, acting on Harita’s behalf, he says. “It is an open secret that people [in government] Those leading the policy changes are the same people who have trusted industries in the nickel industry,” Shennum says.
Indonesia’s HPAL plans show no signs of slowing down. Harita Nickel’s 2023 IPO raised $660 million. This year, Vale announced it is exploring a third $1.9 billion HPAL plant that will produce 60,000 metric tons of nickel, while Indonesia’s state-owned miner Aneka Tambang, in partnership with China’s Ningbo Contemporary Brunp Lygend, will begin building one. HPAL refinery next year.
Indonesia’s comfortable position as the world’s largest producer of low-cost nickel has not translated into power to demand higher environmental and safety standards in the sector. “The hope now is that investor pressure will reach Indonesian shores to pressure the government to implement policies that protect people and the environment. Having more foreign investors (other than China) on the ground is important…otherwise we will only have the market price,” says Adhiguna.
This story was reported with support from the Asia Pacific Foundation of Canada.