Indonesia — the keeper of the world’s largest nickel reserves — is moving in a big way to get the country’s rapidly expanding nickel boom under control. In a move aimed at balancing economic growth with environmental protection, the Indonesian government has suspended nickel mining operations for four out of five companies in the environmentally sensitive region of Raja Ampat.
Raja Ampat is home to an incredible 75% of the world’s coral species and over 1,600 fish species. In reality, it’s been ground zero for environmental devastation as Indonesia quickly grows its nickel capacity. The country has come to completely control the global nickel supply, providing over 75 percent of it as of August 2023. Over the past 10 years, Indonesia has seen a massive rise in the number of nickel smelters, growing from two to 27. In addition, there are 22 more smelters on the drawing board, according to S&P Global Commodity Insights.
Its rapid expansion has caused very real concern about environmental degradation. The Ministry of Environment discovered “several violations in the environmental context” among the companies operating in Raja Ampat. Indonesian Minister for Energy and Mineral Resources Bahlil Lahadalia on 10 June announced the revocation of mining operation permits for these companies. He underscored the depth of the administration’s commitment to protecting the environment.
“We are really serious in our intent to protect the environment in Raja Ampat,” – Minister for Energy and Mineral Resources Bahlil Lahadalia
Now, in an unprecedented move, the Indonesian government has passed a law providing for the management of coastal areas and small islands. This law bans mining in certain areas, including Raja Ampat, to safeguard these delicate ecosystems. Gag Nikel is the sole corporation permitted to run operations on Gag Island. This is due to the geographical fact that the island lies outside the official geopark boundary.
Though this provision would allow some breathing room, environmental organizations and local activists alike fear the long-term effects of expanding nickel mining. Greenpeace Indonesia has vigorously resisted mining development in Raja Ampat. They draw attention to the serious risks these activities present to this beautiful ecosystem, known as the “last paradise on Earth.”
“Now nickel mining is also threatening Raja Ampat, a place that is often called the last paradise on Earth,” – Greenpeace forest campaigner Iqbal Damanik
Yet the Indonesian government has come under fire for even permitting mining operations to invade ecologically rich sacred spaces. More than 500 hectares of forest and vegetation have already been cleared for nickel mines on the West Papua islands of Gag, Kawe, and Manuran. The increasing pressure on natural resources poses significant challenges not only to local biodiversity but to Indonesia’s long-term sustainability goals.
Indonesia has long harbored ambitions to be the kingpin of the global nickel industry. The administration is acting swiftly to de-escalate these tensions. Yet, it needs to keep up with oversight and enforcement to ensure good actors are complying and balancing progress with protecting our critical ecosystems.
