Nickel has upended life on the Indonesian islands of Sulawesi, Halmahera and Obi. Over a decade the region has gone from modest ore exporter to the world’s foremost refiner of the metal. A rural backwater has been catapulted into modernity.
Today this is the home of about 200 smelter production lines and 200,000 factory workers – and there could be more to come. As demand soars for nickel to power batteries and electric vehicles, Jakarta banks on the industry being its ticket to becoming a developed nation by 2045.
At the moment it is knocking the competition out of the water. Indonesia produces about half of all the world’s nickel and has pushed prices so low that most other producers are operating at a loss. Australian miners BHP and Glencore announced in February they may leave the metal altogether.
Indonesia’s recipe for success is cheap coal, cheap ore, cheap workers and Chinese money. But this has meant a steep price to pay for locals, the environment and labourers.
In Kurisa, on the eastern shore of Sulawesi, the air is pungent with the smell of metal. A smelter flanks the settlement on one side and a coal power plant on the other.
Indonesia sits on the world’s largest reserves of nickel but the concentration in the ore is very low. Refining it to battery quality, or even just to make stainless steel, is an incredibly energy-intense process. This has been powered by a construction spree of coal power plants.
Jakarta has created a loophole in its goals to phase out coal to benefit the nickel industry. Since the metal is critical for the green transition, it is allowing new coal power plants connected to nickel smelters as long as they shut down before 2050. This has led to the country setting new records in its coal consumption and carbon dioxide emissions.
Water samples from a range of locations along the coast confirm high levels of heavy metals stemming from the mines and refineries.
In a river near Kurisa, popular for fishing, the concentration of nickel was more than 15 times higher than the World Health Organization’s guideline value. The concentration of hexavalent chromium, a contaminant made famous in the Oscar-winning movie Erin Brockovich, was more than five times higher than WHO’s guideline value for drinking water.