Nickel rush in Indonesia: deforestation rates double around nickel-processing plants 

Indonesia’s nickel boom is causing deforestation, pollution, damage of coastal areas and coral, and loss of livelihoods for local communities. Especially on the islands of Sulawesi and the Moluccas forests are cleared at an alarming rate. It’s not just nickel mining that is causing environmental harm; the rapid increase in nickel-processing plants is also damaging natural ecosystems. In fact, forests are disappearing twice as fast in the regions surrounding these processing plants. 

Header photo: Nickelmine near Siuna, Tompotika, Indonesia (c) Stephanie Broekarts/IUCN NL

Indonesia is one of the countries with the world’s largest nickel reserves. The country aims to dominate the world’s nickel supply by also investing in nickel-processing plants to refine the metal in-country. According to S&P Global Commodity Insights, the country has increased its number of nickel smelters from two to 27 over the past decade, with plans for 22 additional smelters^[1]Source: Indonesia’s massive metals build-out is felling the forest for batteries | AP News. Last year, the country was responsible for more than half the supply of nickel ore globally. Over 90 percent of the nickel produced in Indonesia is exported to China. 

The demand for nickel is growing explosively as it is used in batteries for electric vehicles and in large batteries for clean energy projects. Expectations are that by 2040, almost 60% of global demand could be for clean energy and electric vehicle batteries, and about 80% of the world’s nickel is expected to be mined in Indonesia in 2040. This nickel boom has resulted in the loss of over 75,000 hectares of forest. More than half a million additional hectares of Indonesian forest are within nickel concessions, putting them at risk for deforestation^[2]Source: https://mightyearth.org/wp-content/uploads/2024/05/FromForeststoEVs.pdf

Deforestation increases around nickel smelters 

Research by the Indonesian NGO Auriga Nusantara shows that forests are disappearing twice as fast in areas surrounding nickel-processing plants. A new analysis of rainforest loss, using government data, reveals that deforestation has increased from an average of 33 square kilometers around each smelter to 63 square kilometers^[3]Source: Indonesia’s massive metals build-out is felling the forest for batteries | AP News .  

Timer Manurung, chairman of Auriga Nusantara is deeply worried that deforestation will rise significantly if the plans for the construction of 22 additional smelters are executed. ‘In the past decade, the number of smelters in Indonesia has risen from 3 to 30,’ says Manurung. ‘This surge has resulted in a 234% increase in deforestation. While nickel mining was already the leading cause of deforestation, our research indicates that nickel processing is also contributing significantly to the problem.’ 

‘Nickel mining and refining is a strategic priority for the government of Indonesia,’ Manurung explains. ‘The government wants to assert itself in the global supply chain for the batteries powering electric vehicles and other green technology. What the government fails to see is that the short-term gains of this nickel boom are causing long-term damage to ecosystems and livelihoods that can not be fixed. It is very ironic to say the least that the people that are experiencing most harm by nickel mining and production, will probably never drive an electric car themselves.’  

No-go zones for mining 

‘My ultimate goal would be to stop deforestation in Indonesia completely, but I understand that’s not realistic. The next best thing would be to limit forest and biodiversity loss as much as possible, especially in natural forests, Key Biodiversity Areas, food production areas, IP&LC territories and sacred sites, disaster-prone areas and coastal and small island regions.’ With this in mind Timer and his colleagues at Auriga are working on a map of and consultation process for no-go zones for mining in Sulawesi. IUCN NL is supporting this initiative as part of its Bottom Line! project that focuses on limiting the negative impact of the mining for transition minerals.  

Limit the environmental impact of nickel mining refining 

Maartje Hilterman, senior expert nature conservation at IUCN NL, stresses that automative companies should take steps to trace the origin of their nickel, potentially using satellites, and prohibit nickel sourced from deforested areas.

Video: nickel mining on Sulawesi 

Indonesia’s largest nickel reserves are in Sulawesi. The Tompotika peninsula was recently selected by the government for at least eighteen new nickel mines. The video “Tompotika: Forests, Nickel, and Critical Choices” tells the story of Tompotika and what would be lost if nickel mining is carried out on the peninsula. Our partner organisation  The Alliance for Tompotika Conservation (AlTo) shares how they are working with the peninsula’s residents to protect their wildlife and livelihoods. 

A just energy transition 

The energy transition is fueling a growing global demand for minerals and metals and therefore a mining boom of unprecedented proportions. The World Bank expects the energy transition to increase demand for metals and minerals very rapidly: for nickel, cobalt, lithium and manganese, for example, by more than 500% by 2050. 

To minimize the effects of climate change and minimise warming, we need to switch from fossil fuels to renewable energy sources and our energy consumption. IUCN NL is working towards a fair energy transition that minimises the negative impact on people and nature. We do this in our projects Forests for a Just Future and Bottom Line!.