Now, a growing appetite for electric vehicles is creating new demand for nickel, whose chemical derivatives are increasingly used in cathodes of lithium-ion batteries. But the push for clean energy is coming at an environmental cost to forests and fisheries in one of the world’s most biodiverse regions.
Sahman does not know how much more his fishing village can handle. In the decades of meeting nickel-for-steel demand, the seas have turned red, marine life has left past the horizon, and the exhaust of smelters has triggered respiratory problems.
“We’ve been on the sidelines this whole time,” said Sahman, who is in his 50s. “Villages should instruct companies, not companies instructing villages.”
Down the road from Sahman’s village, the global market has placed what will probably become a main source for the vital nickel component in electric-vehicle batteries. The country’s largest nickel producer, Vale Indonesia, majority-owned by Brazil’s Vale, and Japan’s Sumitomo Metal Mining are in the final planning stages for a mining and smelting operation. Sumitomo plans to double production of battery materials in nine years, focusing on supplying Toyota and Panasonic, supplier of Tesla’s EV batteries.
Toyota said it was working to reduce the amount of metal in its products and the environmental burden. Sumitomo declined to discuss the mine and smelter. Panasonic, Tesla and Vale Indonesia did not respond to questions.
The project is among 25 planned mine-smelter combinations to be opened by 2022 across the country, currently home to 11 smelters. Nickel mines may already number in the hundreds, if not thousands, according to the Mining Advocacy Network, an Indonesian nongovernmental organization known as Jatam.
Electric vehicles will require millions of tons of nickel derivatives in coming decades. Indonesia sees an opportunity that an official has described as potentially larger than its palm-oil industry, blamed for deforestation and forest fires.
“There is a move to increase the amount of nickel and reduce the amount of cobalt in these batteries to improve energy density and, therefore, vehicle range,” said Andrew Mitchell, an analyst at consultancy Wood Mackenzie.
To create jobs and attract more investment, Indonesia recently banned most nickel-ore exports. After a similar ban in 2014, relaxed in 2017, the demand for pure nickel led to the spread of energy-intensive smelters, threatening to cause respiratory problems and water contamination. Companies that had relied on exporting ore abandoned hundreds of mines, leaving sediment to wash into waterways.
A harmful legacy
Environmentalists warn that the drive to expand the industry will come at the expense of local livelihoods, forests and seas.
Sulawesi is home to species found nowhere else, including vibrant hornbills, miniature water buffalo, tusked deer-pigs and some tarsiers, a small, nocturnal primate. Nickel developments stretch to the Maluku Islands, where Europeans in search of spices began colonizing the Indonesian archipelago. The biodiversity there inspired Alfred Russel Wallace’s theories of evolution alongside those of Charles Darwin.
Indonesia is second to Australia in estimated total resources of nickel. But Indonesia’s nickel lies almost twice as concentrated in deposits called laterites that are closer to the surface and may be more appropriate for the battery market, said Gavin Mudd, an environmental engineer at Australia’s RMIT University.
“When you’re looking at laterites, there are major issues with erosion, sedimentation in creeks,” Mudd said.
Only recently have studies shown that nickel content in the sea is 20 times the government’s limit for sustaining life, but Sahman can sense it. Part of his village is built on slag, the waste of nickel smelters. The danger of such waste to humans has been little researched, but it may contaminate waters with toxicants.
Each year, Sahman must travel farther to find fish, his journeys now stretching four hours outside the bay. The region, once known for its sea-cucumber production, can barely produce these days. For some fishermen, it’s more profitable to sell their boats than traverse the red seas.
In 2010, at the end of a decade when Indonesian nickel production jumped 600 percent, Sahman and hundreds of others blockaded barges in the bay after an Environment Ministry order that a mining company compensate fishermen went unanswered. Each family received roughly $7.50 and a boat engine, an implicit message to look elsewhere for fish. The miner, state-owned Aneka Tambang, did not respond to questions.
Activists and researchers say enforcement of environmental and social requirements is weak. One of the most problematic, Mudd said, is the requirement to rehabilitate land after mining.
“If you’re removing forest, you’ll need to restore a forest of equal ecological value after mining,” Mudd said. “There are a lot of promises, but I’ve yet to see good evidence that [companies] have been able to achieve it.”
In the country’s first corruption case that put a price tag on environmental crime, Nur Alam, governor of Southeast Sulawesi province, which encompasses Sahman’s village, last year was handed a 15-year prison sentence and a fine amounting to a fraction of the environmental damages, tallied at about $190 million. Another nearby district head, Aswad Sulaiman, is under investigation, but a leader of the country’s graft watchdog says those cases barely scratch the surface.
“The natural resources industry is one of the most corrupt industries in Indonesia,” said Laode Muhammad Syarif, deputy head of Indonesia’s Corruption Eradication Commission. “Based on government research, more than half — of more than 5,000 mining licenses — are considered illegal or not clean and clear.”
Reality of 'zero emissions'
Most of the billions of dollars flowing toward Indonesia’s nickel come from China. Morowali, in Central Sulawesi province, has become the main nickel hub, thanks to the operation run by China-based Tsingshan, the world’s largest stainless-steel maker. There, researcher Arianto Sangadji of Toronto’s York University saw the growth in mining activity skyrocket last year. Coal-fired plants power the smelters.
“The movement for electric vehicles is for zero emissions, but if you see it in the field, the reality is very different,” Arianto said. “It’s supposed to be renewable, but is it?”
Vale Indonesia’s best-known site is in Sorowako, an area where people are used to seeing promises of prosperity broken, said Kathryn Robinson, an anthropologist at Australian National University.
Vale’s predecessor there, Canada’s Inco, “destroyed their economy, their livelihoods, without any thought about how they were going to systematically build them into the economy they were developing,” said Robinson, who has studied the region since the 1970s.
New growth presents the possibility that the police, army and government will continue to collaborate to evict residents living atop valuable minerals, said Melky Nahar, a campaigner at Jatam.
“As a result, many citizens lose their land, increasing unemployment or forcing locals to join the mining company or try their fortune in big cities,” Melky said.
Hamzah, a schoolteacher who goes by one name, started teaching his students about mining’s impacts after he earned a doctorate studying the disappearance of marine life in Pomalaa. He also works with companies to mitigate those effects.
“You can never guess whether the work you do will be maintained [by the company], but all you can do is try,” Hamzah said. He worked this year on Gag Island, a place Mudd noted is notorious for its delicate marine ecosystem.
“If we want to protect our environment and water resources and communities in Indonesia and elsewhere, that should be the cost of business,” Mudd said. “That should be a minimum.”