Report outlines cost of Indonesia’s EV dream as Chinese-funded nickel plants linked to pollution, ‘land grabbing’

A US-based advocacy group has accused a Chinese-funded industrial estate of causing ‘significant’ environmental harm and violating the rights of indigenous people

The report puts a fresh spotlight on Indonesia’s bid to become a major player in the global EV battery supply chain by growing its nickel-refining sector

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A worker works on a ferronickel production line in Weda Bay Industrial Park, North Maluku, Indonesia. Photo: Xinhua

Published: 3:55pm, 17 Jan 2024Updated: 5:20pm, 17 Jan 2024

A new report accuses a massive China-funded nickel industrial complex in Indonesia’s Maluku province of causing “significant” environmental destruction and existential threats to indigenous peoples in the area, adding to the array of issues the nation faces in becoming a major player in the global electric vehicle (EV) supply chain.

Released on Wednesday by the US-based Climate Rights International (CRI) advocacy group, the report also alleges that the Indonesia Weda Bay Industrial Park (IWIP) in Halmahera, Maluku, worked with Indonesian police to protect the interests of some nickel miners by engaging in “land grabbing, coercion and intimidation of indigenous peoples”.

The CRI report puts a fresh spotlight on China-funded nickel projects in Indonesia, where activists and workers’ unions have raised concerns about safety after a string of fatal accidents. Last month, an explosion killed 10 Indonesians and eight Chinese workers in a nickel smelter linked to China’s Tsingshan Holding Group, at the Indonesia Morowali Industrial Park in Sulawesi, another mining hub.

“While our report does not focus on labour conditions or workers’ rights, the long history of labour rights abuses by Chinese companies operating internationally, and the lack of meaningful government oversight of the nickel industry as demonstrated in our report, is a serious cause for concern,” CRI researcher Krista Shennum told This Week in Asia on Tuesday.

“Given this history, the Indonesian government should take proactive steps to ensure that nickel mining and smelting does not contribute to labour or other human rights abuses, including by regular inspections and holding companies that commit abuses accountable,” added Shennum, one of the authors of the report.

The IWIP is an US$11 billion nickel mining and processing complex set up in 2018 by China’s stainless steel giant Tsingshan, and miners Huayou Cobalt and Zhenshi Holding Group. Within the 5,000-hectare park, Tsingshan runs a nickel mining operation called Weda Bay Nickel (WBN), under a joint venture with French miner Eramet.

The two firms own a 90 per cent stake in the project, while Indonesian mining group Antam owns the remaining interests. Other companies that reportedly have plans to build facilities at IWIP include German chemical giant BASF and South Korean nickel producer Posco.