The Ministry of Energy and Mineral Resources (ESDM) noted that Indonesia has a nickel mine of 520,877.07 hectares (ha). The mines are spread across seven provinces, including Maluku, North Maluku, Papua, West Papua, South Sulawesi, Central Sulawesi and Southeast Sulawesi.
In 2020 the export value of Indonesia’s raw nickel ore is around $200 million. But in 2021 President Joko Widodo instituted a new ban on the export of raw ore in an effort to catalyze the domestic nickel processing industry.
The Chief Minister for Investment, Luhut Panjaitan, said in September 2022 that investment in the Morowali Industrial Zone, in Central Sulawesi province, was set to nearly triple between 2019 and 2022 to around $18 billion.
Indonesia has the world’s largest reserves of nickel, and is touted to produce raw materials for batteries for electric vehicles that are expected to reduce emissions and pollution from transportation over the next decade. However, the presence of nickel smelters in Indonesia actually has a negative impact on environmental quality and disrupts the health of local residents around nickel smelters.
One of the cases that occurred recently was in the Bantaeng Industrial Area, South Sulawesi. The people of Papan Loe Village who live near the Bantaeng Industrial Area, South Sulawesi, have complained about environmental pollution from a nickel smelter. Since PT Huadi Nickel-Alloy Indonesia’s nickel ore refinery started operating, the wells of the residents of Dusun Mawang and Balla Tinggia have run dry.
In addition, the noise from the nickel kiln operates 24 hours a day and produces thick smoke. Excavated soil containing nickel ore, during the rainy season has caused mudflow to roads and settlements. Then when it’s dry, the land produces dust that sticks to the floors and furniture of people’s houses.
The Bantaeng Industrial Estate is a national priority infrastructure project and aims to become one of the largest nickel processing sites in the world. Established by local government decree in 2012. The Bantaeng site spans over 3,000 hectares (7,400 acres) and overlaps six villages, including Papan Loe.
The two hamlets in Papan Loe are covered in dust from morning to night. The dust sticks to the plants of society. They even have to scrub the vegetable plants clean before consuming them.
Adam Kurniawan, former director of the South Sulawesi-based Balang Institute, an NGO, has been monitoring the living conditions of residents around the industrial area since 2013. Adam said some residents had been coughing for months. During the day the volume of dust is not very noticeable, but at night the headlights of company trucks moving back and forth from the site illuminate a thick fog of particles.
A survey by an NGO showed that 37 ground wells have dried up since PT Huadi Nickel-Alloy Indonesia began operating in 2018. Responding to the issue of groundwater depletion, a spokesperson for PT Huadi Lily Candinegara, said that her party had coordinated with the Regional Office of the Ministry of Energy and Mineral Resources who had conducted field checks on Huadi operations. Huadi company has been trying to allay local people’s concerns by emphasizing the use of environmentally friendly technologies to dispose of waste. However, after only a year, residents began to complain because the community experienced health complaints, especially coughing due to the dust produced by the nickel smelter.
The ambition of the Indonesian government to become the main battery producer for electric vehicles in the world market raises questions about the environmental impact of this plan. Environmental experts argue that the government’s ambition is not in line with efforts to combat the effects of the climate crisis.
So far, nickel has been touted as part of creating clean energy because it is the raw material for electric car batteries. However, the government itself has set aside ecosystem and community conditions to develop the nickel mining and processing industry.
Joko Widodo’s government has given a mandate to SOEs which are members of the Indonesian Battery Industry PT (IBC), a consortium of four BUMNs, the other three Indonesian Mining and Industry (MIND IND), PT Pertamina and PT PLN, to manage the electric motor vehicle battery industry.
On April 29, 2021, the company signed a collaboration with the LG battery consortium from South Korea, with an investment value of US$9.8 billion. PT Antam’s Corporate Secretary, Yulan Kustiyan, said that in the electric vehicle battery ecosystem development scheme, the company is involved in processing and refining nickel, battery raw materials, and battery cell packages.
90 percent of Indonesia’s nickel resources are spread across Central Sulawesi, South Sulawesi, Southeast Sulawesi and North Maluku. The annual report from the Central Bureau of Statistics shows that nickel ore production in East Halmahera, as a source of nickel, has also increased dramatically. In 2006, nickel ore mining yields reached 728,460 metric tons, while in 2013 it had reached 9,871,689 metric tons. Allegedly this figure is creeping up along with market demand for nickel.
The hype for eco-friendly electric cars is actually reflected in East Halmahera, especially in the bay area of Maba District, which is a nickel mining area. In May 2022, PT Antam’s waste in Mornopo Bay flows into the sea.
In addition to the nickel company located in Central Sulawesi, Morowali also experienced a negative impact on the settlements around the nickel mine. In 2019 to 2022 floods frequently occur in the Bahodopi mining area, Morowali caused by poor nickel mining and processing activities.
In fact, such cases have occurred in many nickel industrial areas in Indonesia. This raises the question, how can there be claims of pollution-free and environmentally friendly electric vehicles in urban areas if since the manufacture of raw materials it has polluted the environment in rural areas close to mining of battery materials (nickel). Residents in urban areas can enjoy clean air without pollution with electric vehicles, while villagers accept all the risks.