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By cancelling the permits of four out of five nickel mining companies operating in Indonesia’s Raja Ampat archipelago, President Prabowo Subianto this month handed a rare win to environmental groups that have long criticised the rapidly growing industry.
Prabowo’s intervention followed a report by Greenpeace that said nickel exploitation on three Raja Ampat islands had destroyed more than 500 hectares of forest and caused soil run-off threatening the coral reefs and marine ecosystems that have made the islands a treasured diving destination.
But the action to protect an area touted as “the last paradise on earth” will not quiet growing controversy over the impact of the expanding nickel sector in Indonesia, the world’s largest producer of a metal critical for stainless steel and electric vehicle batteries.
“The news this week that the government will cancel four mining licences is a step forward, but it’s not enough,” said Kiki Taufik, head of Greenpeace’s Indonesia forest campaign. “The government has left the door open to polluting nickel mining.”
Raja Ampat includes more than 1,500 islands and islets at the heart of coral-rich waters in Indonesia’s easternmost province of Papua. Home to three-quarters of the world’s coral species and around 2,500 species of fish, it is a popular diving location, and one of the tourist sites that Indonesia is developing as an alternative to Bali, which is grappling with overtourism.
The area, which is also designated by Unesco as a geopark for its geological significance, drew public attention when Greenpeace activists interrupted a speech by deputy foreign minister Arif Havas Oegroseno at a major minerals conference in Jakarta last week. The activists held up signs saying “nickel mines destroy lives” and “what’s the true cost of your nickel?”
Prabowo subsequently ordered an investigation and then the cancellation of the mining licences of four companies operating in Raja Ampat, including at least one that is controlled by a Chinese group.
The environment ministry said its investigation found instances of pollution and mining in protected forest areas. It also said it would take legal action against some of the companies.
“We will not allow an inch of damage to the area that is home to 75 per cent of the world’s coral species and thousands of endemic species,” environment minister Hanif Faisol Nurofiq said in a statement. “Law enforcement and environmental restoration are our main commitments.”
But energy and mineral resources minister Bahlil Lahadalia disputed Greenpeace’s claims that coral reefs had been damaged by nickel mining activities.
He said the four companies that had their licences cancelled — Anugerah Surya Pratama, Kawei Sejahtera Mining, Mulia Raymond Perkasa and Nurham — had not been conducting any mining operations this year. A fifth company, Gag Nikel, is mining and has been allowed to continue production, with the government saying it is located outside the Unesco-designated area.
Anugerah Surya Pratama is 60-per cent owned by Wanxiang Nickel Indonesia, which in turn is owned by China’s Vansun Group, according to Indonesian company records.
The five companies did not respond to requests for comment. In comments reported by local media, Gag Nikel said it was ready to comply with government requirements and to tighten environmental standards.
Criticism has dogged the rapid growth of Indonesia’s nickel industry, which currently controls nearly two-thirds of global supply of the refined metal, up from just 6 per cent a decade ago.
A ban on exports of raw nickel ore in 2020 triggered a wave of investment in nickel processing, mainly from China, as steel and battery producers sought to secure supply.
But that swift expansion has come at a cost.
Competitors and campaigners have accused Indonesia of producing “‘dirty nickel” because of deforestation and other environmental degradation caused by mining and waste disposal from processing, as well as the heavy use of coal to power smelters. Officials have previously denied those claims, but also vowed to improve enforcement of environmental laws.
Worker safety has also been an issue, with nickel facilities suffering frequent accidents.
Greenpeace has called for a ban on all mining and processing activities in Raja Ampat. Taufik said the licences could potentially be restored if the cancellations were challenged in court, as had happened in the past.
