Indonesian president pledges nickel mining clean up amid EV-led boom
INDONESIA will improve monitoring of environmental standards for nickel mining, amid concerns over production of the metal which is increasingly used in electric vehicle (EV) batteries, the country’s President Joko Widodo told Reuters on Thursday (Mar 30).
The South-east Asian country, which has the largest nickel reserves in the world, will step up scrutiny of mining and order companies to manage nurseries to reforest depleted mines, said the president, who is widely known as Jokowi.
Nickel mining and smelting has become a major part of Indonesia’s economy, with billions of US dollars of global investment flowing in to the country after the government banned exports of unprocessed ore in 2020.
However, environmental groups have said Indonesia’s nickel production has polluted key production sites in Sulawesi and Maluku islands, even turning waters in some coastal areas red.
Miners have also been accused of land grabs, while workers in some mines have protested over weak safety standards.
“The most important thing is monitoring. The management control system must be strengthened .. Routine evaluations must be conducted,” Jokowi said during an interview at the nickel mining town of Sorowako on Sulawesi island, adding he would ensure all miners follow international best practice.
A NEWSLETTER FOR YOU
Asean Business
Business insights centering on South-east Asia's fast-growing economies.
The development of the electric vehicle (EV) sector in Indonesia is a personal mission for Jokowi, who has been trying to convince Tesla CEO Elon Musk to manufacture EVs or batteries in the sprawling South-east Asian archipelago.
But indicating concerns over the impact of the industry, dozens of non-governmental organisations last year sent an open letter to Musk, urging him not to invest in Indonesia due to environmental, social and governance (ESG) concerns.
Jokowi said some miners had higher standards than others, praising a local unit of Brazilian miner Vale, which has mined nickel in Sorowako for decades without polluting a nearby lake.
Toxic waste
Jokowi visited Vale Indonesia’s mine and smelter, which uses energy from three hydropower plants, to see first hand an investment deal with US carmaker Ford Motor and China’s Zhejiang Huayou Cobalt to build a US$4.5 billion high-pressure acid leaching (HPAL) plant.
“Sustainability is measured in two aspects: how long your reserves last, that’s important, and operations of the mines. ESG cannot be bargained for if we want to continue to go forward,” he said.
Jokowi said he would only approve new smelter permits if powered by renewable energy sources, which he said would raise the cost of new investment and be an entry barrier.
“We must control our output so that prices do not plunge because of our over production and over supply,” he said, noting an influx of investment to process ore into nickel pig iron.
He said existing facilities using coal power would also be given deadlines to change their energy sources into renewables.
More companies are now building HPAL plants, converting low-grade nickel ore into material used in EV batteries, but also producing toxic waste that must be treated and stored.
Vale Indonesia plans to break ground on a second HPAL plant with Huayou in South Sulawesi later this year.
Melky Nahar, of the Mining Advocacy Network (JATAM), said many companies did not comply with standards and questioned if there could be “political will” to enforce environmental rules.
But Jokowi said progress had been made, such as the government forbidding the dumping of tailings in the sea. REUTERS
KEYWORDS IN THIS ARTICLE
BT is now on Telegram!
For daily updates on weekdays and specially selected content for the weekend. Subscribe to t.me/BizTimes
Asean
Magnitude 6.0 quake strikes Philippines, aftershocks and damage expected
Indonesia central bank says SRBI auction will be held twice a week to attract more inflow
Thai police raid illegal bitcoin mining operation
Thailand’s April inflation rises slightly, first time in 7 months
Myanmar junta bans men from applying to work abroad: statement
Microsoft CEO pledges RM10.5 billion in cloud, AI investment in Malaysia