The global push for electric vehicles (EVs) as a cleaner alternative to fossil fuels is gaining momentum, but the environmental and social costs of EV battery production are becoming increasingly apparent. Nickel, a key component in many EV batteries, is at the center of this dilemma. As the demand for EVs surges, so does the pressure on Indonesia’s small islands, where nickel mining is causing severe ecological destruction and harming local communities.
Nickel-based batteries, especially those using Nickel Cobalt Manganese (NCM), dominate the EV market, making up 60% of global market share, according to the Global EV Outlook 2023. While alternative battery chemistries, such as Lithium Ferro Phosphate (LFP), are growing in popularity, nickel’s role remains critical. With global EV sales rising 21% in July 2024 compared to the previous year, and Chinese-made vehicles leading the charge, the demand for nickel continues to soar.
Indonesia, sitting on 52% of the world’s nickel reserves, plays a pivotal role in this booming industry. By 2023, nickel exports from Indonesia had increased tenfold, driven by government policies encouraging “downstreaming”—the process of refining raw nickel into higher-value products. Most of Indonesia’s nickel exports are sent to China, which imported nearly four million tons in 2023. Japan, Australia, and Greece follow, but in much smaller amounts.
However, the benefits of this mining boom have come at a significant environmental and social cost, particularly on small islands like Obi and Wawonii. On Obi, the combined mining efforts of China’s Lygend Resources and Indonesia’s Harita Group have ravaged forests, contaminated water sources, and caused widespread environmental degradation.
Similarly, my visit to Wawonii, an island east of Borneo, highlighted the stark contrast between the island’s past self-reliance and its current struggles. Before mining operations arrived, the island’s residents thrived on agriculture and fishing, growing crops like cloves, nutmeg, coconuts, and cashews. These products not only provided sustenance but also income for families and funds for children’s education. Fishing was also plentiful, forming the backbone of the local diet. Today, mining dust destroys crops, and local fishermen are forced to go further out to sea to catch fish, increasing costs and reducing their earnings.
Despite the government’s Coastal and Small Island Management Act of 2007, which bans mining activities on small islands, mining continues unchecked. In fact, the Indonesian government has approved mining on islands like Wawonii, disregarding its own laws. Although the Indonesian Supreme Court has ruled in favor of residents who fought to protect their land, mining persists, splitting local communities between pro-mining and anti-mining factions and weakening the once-cohesive social fabric.
With little external pressure to change course, the Indonesian government continues to prioritize economic benefits over the environmental and social well-being of its citizens. As the largest importer of Indonesian nickel, China shares responsibility for ensuring that the nickel it sources is mined sustainably. The European Union, the UK, and the U.S. have set precedents for driving change through policies mandating environmentally responsible imports. For example, the EU’s “deforestation-free” policies for palm oil pressured Indonesia into reforming its practices. China could implement similar measures for nickel, ensuring that its supply chain is both environmentally and socially responsible.
If China fails to act, it will continue to support the destruction of ecosystems and the exploitation of local communities in Indonesia. With its immense influence over the global nickel market, China has the power to push for responsible sourcing and ethical mining practices that could mitigate the damage caused by nickel extraction.
The global push for green technologies, including electric vehicles, offers hope for a cleaner future. But the extraction of the materials required for these technologies cannot come at the expense of vulnerable ecosystems and communities. As the world transitions to cleaner energy, it’s essential that the supply chain behind these innovations is also sustainable. China, as the primary consumer of Indonesian nickel, must take a leading role in ensuring that its nickel sourcing practices protect both the environment and the people of Indonesia.
Failure to act could have far-reaching consequences—not just for Indonesia, but for the global community. The promise of clean energy must extend beyond the end product to the very materials that make it possible. Only through responsible sourcing and ethical practices can the world truly achieve a sustainable future without sacrificing the well-being of vulnerable populations and ecosystems.
