President Jokowi Pledges Nickel Mining Clean Up Amid EV-Led Boom

Photo credit: Reuters Indonesia will improve environmental monitoring for nickel mining, amid concerns about the metal's production, which is increasingly used in electric vehicle batteries, said Indonesian President Joko Widodo on Thursday. The country, which has the world's largest nickel reserves, will increase mining oversight and require companies to manage nurseries to reforest depleted mines, according to President Jokowi. Nickel mining and smelting has become a major part of the Indonesian economy, attracting billions of dollars in global investment since the government banned unprocessed ore exports in 2020. Environmental groups, on the other hand, claim that Indonesia's nickel production has polluted key production sites in Sulawesi and Maluku islands, even turning the waters in these islands red.

Miners have also been accused of land grabbing, and some mine workers have protested over poor safety standards. "The most important thing is to keep an eye on things. The management control system must be improved... "Routine evaluations must be carried out," Jokowi said during an interview in the nickel mining town of Sorowako on Sulawesi island, adding that he would ensure that all miners adhere to international best practises. Jokowi has made the development of the electric vehicle (EV) sector in Indonesia a personal mission, attempting to persuade Tesla CEO Elon Musk to manufacture EVs or batteries in the vast Southeast Asian archipelago.

However, dozens of non-governmental organisations (NGOs) sent Musk an open letter last year, urging him not to invest in Indonesia due to environmental, social, and governance (ESG) concerns. Jokowi praised a local unit of Brazilian miner Vale for mining nickel in Sorowako for decades without polluting a nearby lake, saying some miners had higher standards than others. Jokowi paid a visit to PT Vale Indonesia's mine and smelter, which uses energy from three hydropower plants, to see firsthand an investment agreement between Ford Motor Co of the United States and Zhejiang Huayou Cobalt of China to build a US$4.5 billion high-pressure acid leaching (HPAL) plant. "Sustainability is measured in two ways: how long your reserves last, which is important, and mine operations." "ESG cannot be bargained for if we are to move forward," he said. Jokowi stated that he would only approve new smelter permits if they were powered by renewable energy sources, which he claimed would raise the cost of new investment and act as a barrier to entry. "We must control our output so that prices do not fall due to overproduction and oversupply," he said, citing an increase in investment to process ore into nickel pig iron.

He also stated that existing coal-powered facilities would be given deadlines to transition to renewable energy sources. More companies are constructing HPAL plants, which convert low-grade nickel ore into material used in EV batteries while also producing toxic waste, which must be treated and stored. Vale Indonesia and Huayou plan to break ground on a second HPAL plant in South Sulawesi later this year.
According to Melky Nahar of the Mining Advocacy Network (JATAM), many companies do not comply with standards, and she questions whether there is "political will" to enforce environmental rules. However, Jokowi claimed that progress had been made, such as the government's prohibition on dumping tailings into the sea.