Chinese, French funded nickel hub stoking deforestation on Indonesia island: report

A nickel processing hub in eastern Indonesia, financed by Chinese and French entities, is contributing to deforestation and pollution in the area, a report by US-based NGO Climate Rights International revealed this week, according to an AFP dispatch yesterday.

This development comes as China places significant investments in the metal essential for electric vehicle (EV) batteries.

Indonesia, a leading global nickel producer, has attracted substantial interest from both domestic and international firms aiming to mine this crucial component for EVs. The focus is on the Weda Bay Industrial Park located on Halmahera Island in the Maluku region.

“The park is causing significant deforestation, air and water pollution, and emitting massive amounts of greenhouse gases from captive coal plants,” the NGO stated in its Wednesday report.

The report highlighted the cutting of at least 5,331 hectares of tropical forests within nickel mining concessions on Halmahera, resulting in a loss of approximately 2.04 metric tons of stored greenhouse gases (CO2e).

The park’s operations are managed by a joint venture between three China-based companies—Tsingshan, Huayou Cobalt, and Zhenshi Holding Group—with France’s Eramet also being a key investor.

Local inhabitants, in their accounts to the NGO, accused the companies of “land grabbing and intimidation,” facilitated by the police.

Since 2018, the industrial park has established five coal-powered plants to operate its smelting facilities and intends to build 12 more, a scale of coal consumption surpassing that of countries like Spain or Brazil.

The NGO urged the plants’ management to address the water and air pollution caused by their activities and called for appropriate disposal of mine tailings by nickel companies to reduce environmental harm.

Responses to AFP’s inquiries for comment from Tsingshan, Huayou, Zhenshi, Eramet, and the industrial park were not immediately available.

China’s escalating involvement in Indonesia’s nickel sector has sparked concerns over labor conditions and the hidden costs of Jakarta’s aspiration to be a key player in the EV supply chain, AFP said.

Recently, Indonesian workers protested at a nickel plant on Sulawesi Island following an explosion that caused at least 19 fatalities and numerous injuries.

Indonesia boasts the largest nickel reserves in the world, holding over 21 million tonnes and accounting for more than 20% of the global total. MDT/Agencies