Indonesia now produces more than half of the world’s nickel supply [1], fueling the global production of electric vehicle batteries.
This industrial surge places the nation at the center of the green energy transition. However, the rapid scale of extraction creates a tension between global climate goals and the local ecological stability of Indonesian islands.
Much of the activity is concentrated on the island of Sulawesi. Reports from six different mining locations indicate that while the industry provides essential jobs, it also causes significant environmental damage and public health concerns [1, 2]. The expansion is driven by a global appetite for nickel, prompting the Indonesian government and private firms to increase output [1, 3].
The scale of the operation is immense. Indonesian nickel smelters will require between 340 million and 350 million tons of ore in 2026 [3]. This demand puts pressure on forests and local water systems, a cost that residents in mining regions are increasingly forced to pay.
Market volatility also persists despite the production surge. Some analysts said that 10% to 15% of high-grade nickel pig iron capacity at Weda Bay may be placed under risk [4]. This instability highlights the fragility of the supply chain, even as the environmental footprint expands.
Local communities continue to navigate the trade-off between economic opportunity and health. The mining process often results in tailings and pollutants that affect the surrounding land and sea, complicating the narrative of a "green" transition [1, 2].
“Indonesia now produces more than half of the world’s nickel supply.”
The reliance on Indonesian nickel reveals a paradox in the shift toward electric vehicles: the minerals required to reduce carbon emissions globally are often extracted through processes that degrade local ecosystems. As Indonesia dominates more than 50% of the global market, the international battery supply chain becomes increasingly dependent on a single region's regulatory and environmental standards.
