Indonesia is a key country for the global nickel supply chain with 42.30 percent of global nickel reserves, representing 50 percent of total mined nickel and 42 percent of processed nickel in 2023. Even though Indonesia’s processed nickel is mostly being used for stainless steel production, rapid growth of Chinese investment has turned Indonesia into the new center of nickel production. This is done through High-Pressure Acid Leaching (HPAL) technology that results in mixed hydroxide precipitate (MHP), a raw material of electric vehicle (EV) batteries.

Two mining companies, Sulawesi Cahaya Mineral (SCM) Ltd. and Hengjaya Mineralindo (HM) Ltd., and two smelter companies, Huayue Nickel Cobalt (HNC) Ltd. and OMB New Energy Materials (OMB) Ltd are part of the mixed hydroxide precipitate (MHP) supply chain production at the Indonesia Morowali Industrial Park (IMIP). Because these companies are part of large holdings in the integrated nickel business made up of Huayou Cobalt, GEM Co. Ltd, Merdeka Group, Nickel Industries, and Tsingshan Group, nickel production for electric vehicle batteries in Indonesia is characterized as monopolistic.

The role of Indonesia nickel production in the global green energy transition is ironic. Nickel mining operations are mandating deforestation and threatening biodiversity, causing water pollution, and triggering a lot of lawsuits against local communities. Nickel production generates low-paying jobs and use massive amounts of fossil fuels at captive coal power plants. HM, SCM, HNC, and OMB represent the filthy face of Indonesia’s nickel supply chain. To prevent more damages, the Indonesian government and nickel companies must implement high environmental and human rights standards as mandatory requirements in nickel mining and smelting activities.

Download our article by filling out this form.