Indonesia Moves Away from Ocean Mine Waste Dumping

Indonesia’s Move Away from Ocean Mine Waste Dumping Sets Example for Norway, Papua New Guinea

Earthworks & Aksi Ekologi dan Emansipasi Rakyat Press Release

9 February 2021

Nickel demand is expected to increase six-fold by 2030, driven in large part by demand for electric vehicle batteries. Last week Tesla, whose CEO Elon Musk famously promised a “giant contract” to any company able to source nickel “efficiently and in an environmentally sensitive way,” submitted an investment proposal to the Indonesian government. The next day, the country announced that new mining projects would not be permitted to dump their waste into the ocean. Ocean dumping is a cheap and convenient way to dispose of mine waste, but due to its environmental and health impacts has been phased out or prohibited in most parts of the world. Indonesia’s move away from ocean dumping means two major projects, one an expansion of the Indonesia Morowali Industrial Park and the other a new processing facility on Obi Island, must come up with safer plans to manage tens of millions of tons of waste.

Below are statements from Pius Ginting, the coordinator of Aksi Ekologi dan Emansipasi Rakyat (AEER) in Indonesia, and Ellen Moore, Earthworks’ international mining campaign manager.

“We are encouraged by the government's commitment not to allow new projects that will dispose of harmful mine waste into the highly biodiverse Coral Triangle. The next step is for this standard to become law, and to develop safer tailings management systems at the Morowali Industrial Park and the nickel project at Obi Island. We must apply lessons learned from the Ramu nickel mine in Papua New Guinea and the ongoing environmental crisis at the Batu Hijau mine, both of which are currently polluting the ocean with deep sea tailings dumping.  As our government enters into negotiations with Tesla this week, we reiterate that Indonesia’s nickel battery production must be built on strong environmental and social protections, which includes no deep sea tailings disposal or coal fired power plants.” --Pius Ginting, AEER

“This announcement from Indonesia proves that we don’t have to choose between clean energy and respect for human rights. Deep sea tailings disposal is a dirty and outdated practice that threatens marine biodiversity and coastal communities. Norway and Papua New Guinea must take notice. Both are pushing ahead harmful deep sea tailings disposal projects despite the risks to ocean life and strong opposition from impacted communities. But pressure is mounting from consumers and investors. Electric vehicle and tech companies don’t want to be associated with these irresponsible practices and can drive higher industry standards for minerals sourcing across the board.”

CONTACTS:

Pius Ginting,  Aksi Ekologi dan Emansipasi Rakyat
pius.ginting@gmail.com (Indonesia)
Brendan McLaughlin, Earthworks, bmclaughlin@earthworksaction.org

Facing green pressure, Indonesia halts deep-sea mining disposal

By Fransiska Nangoy, Fathin Ungku

https://www.reuters.com/article/us-indonesia-mining-environment-exclusiv-idUSKBN2A50UV

5 February 2021

JAKARTA (Reuters) - Indonesia will no longer permit mining waste to be disposed in the ocean to allay concerns about the environmental impact of processing nickel used in electric vehicle (EV) batteries, a government official and a corporate mining source said.

The Southeast Asian nation, the world’s biggest nickel producer, has not officially banned so-called deep sea tailings (DST) but by not issuing new permits it could delay planned projects and complicate efforts to dispose of waste.

Proponents of DST say it is cheaper and less harmful to pipe waste into the sea, especially on tropical islands where earthquakes or heavy rain limit storage, but critics says the impact of such marine disposal is poorly understood.

“There is no written regulation yet, but the policy is to not issue permits for deep sea tailing for any future projects,” Jodi Mahardi, a spokesman for the Maritime and Investment Affairs Coordinating Minister, told Reuters.

Up to now only one nickel mine in Papua New Guinea is using DST, according to global producer association the Nickel Institute.

Indonesia currently uses the disposal method at its second-largest copper mine, run by PT Amman Mineral Nusa Tenggara.

Indonesian nickel projects seeking permission for DST did not receive an outright rejection, but a lengthy wait meant that land tailings eventually become “the only option”, according to a corporate mining source familiar with the matter.

Once the world’s biggest exporter of nickel, Indonesia banned ore exports last year amid efforts to develop a full nickel supply chain, starting from extraction, processing into metals and chemicals used in batteries, all the way to building EVs.

At least four high-pressure acid leach (HPAL) plants, which process nickel laterite into chemicals used in batteries, are being constructed in Indonesia led by Chinese investors. Most planned to dispose waste in the sea.

HPAL projects in Morowali, in Sulawesi, have decided to drop DST, said a source familiar with the matter. Meanwhile, an HPAL project in Obi Island is still waiting for the government’s decision.

Changing to disposing tailings on land from the ocean would require a major plant rework, said Angela Durrant, a nickel costs researcher at Wood Mackenzie.

“It would cost a fortune to switch from one established form of tailings disposal to another method,” Durrant said. However, she said that most new HPAL projects in Indonesia are unlikely to have set up any disposal systems yet.

CHINA-LED INVESTMENT

Despite obstacles, Indonesia is expecting investment in nickel processing to double from 2020 to $35 billion by 2033, led by Chinese stainless steel producers and battery makers.

The country also signed a $9.8 billion EV battery deal with South Korea’s LG Energy Solution in December.

Indonesia has also been wooing Tesla, which has been looking to find reliable sources of nickel globally after warning the current cost of batteries remains a hurdle to growth. Tesla has sent an investment proposal and the government will meet with the company next week, Septian Hario Seto, the deputy head for investment and mining coordination said on Friday.

Maritime and Investment spokesman Jodi said that the Indonesian government was well aware of the need to uphold green standards
“otherwise, companies like Tesla would not come here”.

Indonesia has a chequered environmental track record in mining so EV companies could be cautious about directly investing given environmentally-conscious consumers, experts say. “There’s potential in Indonesia but there’s also risk involved if they don’t have the right policies,” said Andrew Miller, product director at EV battery metals consultancy firm, Benchmark Intelligence Minerals.

Reporting by Fransiska Nangoy, Fathin Ungku; Editing by Ed Davies and Christian Schmollinger