Sustainability
competing candidates used them to pounce on their opponents and campaign teams. Prabowo Subianto and Jokowi’s son, Gibran Rakabuming Raka, who rose as the winning pair in this year’s presidential election, have clearly indicated their intention to continue Jokowi’s nickel programme. The two and their supporters accused Tom Lembong, Jokowi’s former trade ministry and now heading presidential candidate Anies Baswedan’s campaign team, of spreading public lies about how Indonesia played a big part in plummeting global nickel prices. As the world’s largest nickel producer and reserve
holder, according to data from the United States Geological Survey, downstream processing is seemingly inevitable for Indonesia. Yet, the sustainability of continuous extraction and value addition remains a question. To address this, The Conversation Indonesia interviewed Putra Adhiguna, managing director of the Energy Shift Institute; Putra Hanif Agson Gani, a doctoral candidate in Minerals and Energy Resources Engineering from the University of New South Wales Sydney; and Krisna Gupta, a senior fellow from the Center of Indonesian Policy Studies, to dissect the crucial aspects of ensuring a sustainable nickel industry from upstream to downstream.
Realigning the nickel industry narrative Adhiguna asserted the complexity of Indonesia’s nickel industry’s sustainability issues, entwined with economic, social and environmental concerns, becomes more convoluted due to the potential conflicts of interest stemming from national and local officials’ involvement in nickel management. The power dynamics risk narrowing the discourse on nickel to specific, somewhat constricted issues. For instance, the narrative around nickel downstreaming, heavily promoted by Jokowi, is often linked to Indonesia’s ambition to become a global EV battery producer. In reality, 70% of Indonesia’s nickel is absorbed for stainless steel production, a primary material for items from kitchen utensils to skyscrapers and wind turbines. Only 5% of the total production goes into batteries. “In my view, we will never become a global EV giant. I believe that (narrative) is misleading,” Adhiguna says. His research indicates Indonesia currently controls only 0.4% of the global electric battery market.
According to Adhiguna, the nickel industry’s strong narrative for EV battery development hinders a comprehensive discussion of its economic and environmental sustainability. Nonetheless, he argued that nickel downstreaming for battery raw materials must proceed alongside other derivative products. But at the same time, the government should realign its ambitions and narratives that have become the public discussion.
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Incentives for decarbonisation and waste management According to Gani, the nature of the mining and processing industry makes it challenging to be entirely “clean” environmentally.
At the upstream level, emissions arise directly and indirectly from mining equipment and the energy needed for processing. Land dredging also alters the landscape, potentially impacting wildlife. Meanwhile, downstream, nickel processing in smelters using pyrometallurgy (burning processes) emits high air pollution levels and produces exhaust gases that contaminate the air. Hydrometallurgy – the extraction of nickel with chemical solutions mainly used for producing battery raw materials – generates waste that risks polluting water and soil.
Gani suggested that companies integrate their power sources with renewable energy to reduce the nickel industry’s environmental impact. Investing in low- emission equipment can also be part of the solution. Companies can also manage/recycle waste for reuse. For example, processing exhaust gases from smelters into hydrogen can be used again as an energy source. However, managing environmental impacts is a costly undertaking, leading most mining companies in Indonesia to avoid them. Gani noted that companies mostly tried to meet the demand for a “green” mining industry by simply adhering to the Ministry of Energy and Mineral Resources’ mandated use of biodiesel – and even that comes at a high cost.
This is where the nickel industry needs government support. “From the government itself, I believe there must be incentives for emission reduction,” he asserted.
Pressures from consumers Adhiguna noted that government efforts alone were insufficient to enhance the nickel industry’s environmental sustainability. Indonesian nickel consumers can also play a significant role in demanding sustainable mining and processing practices. For instance, Indonesian nickel product users could adopt the EU’s policy requiring bioenergy only from sustainably managed sources free from deforestation. Although this policy has created tensions with Indonesian palm oil producers, the stringent regulations eventually forced companies to adapt. According to him, the most feasible demands for sustainable nickel could come from producers and consumers of EVs and their components, such as batteries. These manufacturing companies could also make collective demands. However, implementation is challenging due to the current trade tensions between China and other countries.
Adhiguna added that another approach is for consumers of nickel pig iron (processed nickel for stainless steel raw materials) to demand that smelter operators adopt more environmentally friendly practices, including the sustainable
World Mining Frontiers /
www.nsenergybusiness.com
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