Indonesia's Nickel Boom Fuels Electric Vehicles as Mining Communities Face Pollution and Displacement

Weda Bay Pays the Price for the Battery Boom

On Indonesia's Halmahera island, 18 nickel refineries and 11 power plants burning coal have helped turn Weda Bay into the world's largest nickel production center. Across mining concessions covering 2,560 square kilometers, the rush to supply a metal used in electric vehicle batteries has brought industrial growth alongside forest destruction, polluted water and mounting pressure on village life.

Abdullah Ambar, a 64-year-old fisherman, returned to Lelilef Sawai village a decade ago after decades at sea. He wanted peace, built three boats and earned a living from the abundant waters of North Maluku province. Fish were close enough to shore that families could feed themselves with a short trip in a small canoe.

Ambar described how accessible that food once was:

You can find fish just 10m from shore," he recalled. "If people were hungry, they could take a small canoe, go out for an hour or two, come back home, and eat.

In 2018, a nickel processing facility began operating across Weda Bay, supplied by a power plant burning coal with a capacity of six gigawatts. Within years, green hills had become bare red clay that washes into the sea when it rains. Cargo ships carrying coal and nickel ore damage coral reefs.

Four villages along the bay now host 80,000 workers. Dormitories and industrial haze have replaced a landscape where residents once watched the stars. For families who depended on fishing and farming, the battery industry's expansion has changed the water, land and daily routines that supported them.

Electric vehicles are intended to help countries meet their targets for reaching net zero emissions. In Indonesia's nickel regions, however, producing some of the materials for those vehicles depends heavily on coal and creates pollution close to people's homes.

Why Nickel Matters to Electric Vehicles

Nickel is a primary component in electric vehicle batteries because it provides high energy density. In simple terms, it helps a battery store more energy, allowing a vehicle to travel farther before it needs charging. That makes Indonesia's large nickel industry a central supplier to the global shift toward electric transport.

Indonesia produces approximately 2.2 million tonnes of nickel annually. Its share of global supply is described as nearly 40 percent and also estimated at approximately 60 percent. The two figures leave its precise share unclear, although both place Indonesia at the center of the market. The International Energy Agency projects that nickel demand will double by 2050 as countries pursue their climate targets.

Brad Adams, executive director of Climate Rights International, described the damage that can accompany projects promoted as environmentally beneficial:

nickel and other mega-projects are often launched under the banner of green development but leave behind a trail of social and environmental harm.

Indonesia's Ministry for National Development Planning, known as Bappenas, says 97 percent of electricity used for nickel processing comes from plants burning coal. In 2023, the industry consumed roughly 100 billion kilowatt-hours, an amount equivalent to powering 10 million homes for a year.

Processing each tonne of nickel suitable for batteries releases an estimated 93 tonnes of carbon dioxide equivalent. This measure combines the warming effects of different greenhouse gases into a common unit. A typical passenger vehicle emits about 4.6 tonnes annually, illustrating the scale of emissions associated with processing the metal.

Battery production requires enormous amounts of energy. Indonesia's reliance on coal means the process carries a large carbon footprint, weakening the climate benefits of the electric vehicles it supplies while concentrating pollution in mining and industrial communities.

Export Bans Brought Refineries and Chinese Investment

Jakarta's bans on exporting raw nickel ore in 2014 and 2020 pushed companies to build refineries inside Indonesia to gain access to its reserves. The policy sought to move more processing into the country instead of sending its mineral resources abroad without that industrial activity.

Chinese firms have invested billions and dominate the sector. Irwandy Arif of the Indonesian Mining Institute said Chinese companies offered faster, cheaper refinery construction backed by their government. He described the speed at which that investment could deliver a smelter:

"All [Indonesia] has to do is sit back and relax and before you know it, a smelter is up and running," he noted.

The Indonesia Weda Bay Industrial Park, known as IWIP, anchors the industrial complex on Halmahera. Chinese conglomerates Tsingshan Holding Group, Huayou Cobalt and Zhenshi Holding Group manage the park. Officials celebrate the economic growth generated by such developments, while nearby residents describe environmental damage and losses to their livelihoods.

Evvy Kartini, founder of the National Battery Research Institute, questioned how much Indonesia gains when foreign companies control production:

"We can say that we are the biggest producer, but all of it is China-owned. [The production] only took place on our land. We sold our nickel-rich soil to them," she said.

Kartini's concern extends beyond ownership. Without technology transfer, she argues, Indonesia risks continuing to supply resources without building the knowledge and industrial capacity needed to capture more of their value. Technology transfer means gaining the skills and methods to develop and operate production, rather than simply hosting facilities.

Kartini also challenged the distribution of investment benefits:

We will lose if we only have the land but not the technology. We need to question who benefits the most from the investment. What about the local people?

Forest Clearing Changes the Land and the Floods

Research by the University of California, Berkeley and Climate Rights International documents at least 5,331 hectares of tropical forest cleared within nickel concessions on Halmahera. That clearing released approximately 2.04 million metric tonnes of greenhouse gases previously stored in the forests.

Removing forest also changes watersheds, the areas where rain drains into rivers and other waterways. The clearing has increased flooding risks across the region, adding another burden for communities living near mining operations.

Adrian Patapata, a 65-year-old resident of Kobe village, described floods that had grown from minor disruptions into dangerous events. Water now reaches his chest, and his family builds makeshift platforms in the rafters to stay above it.

Patapata explained where the water reaches and where his family takes shelter:

"Nowadays, the water comes up to here," he explained, gesturing to his chest. "And when it does, we sleep up there," pointing to rafters where his family builds makeshift platforms.

In August 2025, floodwaters covered his neighborhood for six days. Red and orange sludge from mining operations spread across his farmland, destroying it and leaving him struggling to grow productive crops.

Patapata described the lasting damage to his soil:

The soil is no longer good," he said. "Nearly everything I planted grew sickly and unproductive.

For families such as Patapata's, a flood is also a threat to future food and income. Water can recede while damaged farmland continues to affect the household long afterward.

Fishing Communities Lose Access to Their Waters

On Kabaena island in Southeast Sulawesi, mining operations cover three-quarters of the island's territory. The Bajau people, known as Sea Nomads for their exceptional diving abilities, face threats to a way of life built around the sea.

Mighty Earth reports that three children drowned between 2021 and 2023 in murky waters contaminated with nickel near Baliara village. Other children suffer skin infections after entering seawater tinted red by pollution.

A resident described the restrictions families now place on their children's lives:

"We cannot allow our children to swim in the sea anymore; their childhood is being stolen," one resident explained.

On Halmahera, Max Sigoro, a 51-year-old fisherman from Gemaf village, described both polluted water and restrictions on access near IWIP. His account links the loss of fishing grounds to mining activity, machinery and discharges from power plants.

Sigoro recalled what the sea was like before mining and explained the conditions he now faces:

Before the mining, the fish stock was abundant, the sea was clear. Now, I can't catch fish near [IWIP]. The water is dirty, and the security chases us away. The water pollution is from mining. There is oil in the water from the machines. Also, hot water from the power plants is polluting the ocean.

Ambar's memories of fishing just off the shore and Sigoro's account of being driven away show how the changes extend beyond the appearance of the bay. Residents who once depended on nearby waters now face pollution and barriers to reaching them.

Obi Island's Water and Halmahera's Land Disputes

On Obi Island, leaked internal documents reveal pollution associated with Harita Group operations, which began in 2010. Company emails flagged contamination by hexavalent chromium in the Tugaraci river as early as 2012. The substance is a known carcinogen, meaning it can cause cancer, and its drinking water limit is 50 micrograms per liter.

Internal tests in 2022 found levels 19 times higher than legal thresholds in springs used by Kawasi villagers. Residents report stomach ailments from water described as their only available source.

Officials knew the source of the contamination but marked the information for internal review only. The company proceeded with a $660 million stock listing while claiming that water quality met standards. A stock listing allows investors to buy shares in a company.

In Halmahera, Climate Rights International interviewed 45 residents near IWIP and documented pressure on landowners to sell. Its investigation describes companies coordinating with Indonesian police and military personnel to obtain property for a fraction of the prices residents requested.

Maklon Lobe, an Indigenous Sawai farmer, held legal title to 38 hectares. He rejected offers equal to just 15 percent of his asking price and then faced repeated police visits demanding an explanation for his refusal.

Companies subsequently blocked access to his land and cut his trees without consent, according to the investigation. Lobe eventually sold under duress during a meeting at a police station. He received payment for only eight of his 38 hectares, at prices below the agreement.

Lobe's experience places land rights alongside water pollution and forest loss in the debate over nickel development. For the Sawai and other Indigenous communities, access to land is tied directly to farming, income and the ability to maintain their way of life.

Automakers Face Demands to Trace Their Nickel

Nickel from Halmahera and Sulawesi enters supply chains serving Tesla, Ford, Volkswagen, BMW, Mercedes-Benz, Toyota and Hyundai. Contracts connect Indonesian operations with these major global automakers, which pledge to source materials ethically.

Tracing a particular batch back to a mine is difficult because materials mix during processing. Environmental groups are calling on automakers to audit their supply chains all the way to individual mines, rather than stopping at the companies supplying processed material.

The 2022 US Inflation Reduction Act requires such traceability for vehicles to qualify for tax rebates. The EU Battery Regulation requires identification of mines that destroy forests or damage waterways.

Activists argue that buying materials from operations such as IWIP conflicts with the environmental promises used to market electric vehicles. Their demand places responsibility on the companies purchasing nickel as well as those mining and processing it.

Renewable Energy Plans Meet Practical Limits

Indonesian officials have begun acknowledging governance failures. Raden Sukhyar, an adviser on downstreaming at the Ministry for Industry, addressed shortcomings in the industrial processes used to turn minerals into more valuable products.

Sukhyar said some processes "lack proper governance" and described environmental concerns as "homework that still needs to be done."

In June 2025, Bappenas launched a roadmap targeting an 81 percent reduction in nickel industry emissions by 2045. The plan relies on hydropower, solar and wind energy to reduce dependence on coal.

IWIP announced plans for a solar farm with a capacity of two gigawatts and 500 megawatts of wind capacity. It also committed to reforestation across 40,000 hectares and the deployment of electric trucks. No clear operational timetable was given for the renewable energy projects.

Researchers at World Resource Institute caution that Halmahera lacks the electricity grid infrastructure and suitable rivers needed for hydropower. Solar and wind remain options, but the availability of land constrains their development.

The difference between an announced project and an operating energy supply matters for the industry's emissions. Refineries continue to need large amounts of electricity while the proposed alternatives face infrastructure and land constraints.

Mining Limits and Enforcement Mark a Government Response

Indonesia reduced its national nickel mining quota for 2025 by 120 million tons, from 272 million to 150 million tons. The reduction, about 44 percent, was intended to preserve reserves and enforce environmental standards.

In June 2025, the Environment Ministry sanctioned the Indonesia Morowali Industrial Park, known as IMIP, in Sulawesi. The facility had operated on 1,800 hectares outside the scope of approved environmental impact assessments and failed to manage wastewater. Those assessments set out the expected environmental effects of a project and the measures needed to address them.

President Prabowo Subianto also revoked the licenses of four nickel mining companies in Raja Ampat following environmental violations documented by Greenpeace.

The industry's expansion and the response to its damage span more than a decade:

• 2010: Harita Group operations began on Obi Island.
• 2012: Company emails flagged hexavalent chromium contamination in the Tugaraci river.
• 2014 and 2020: Indonesia imposed bans on raw nickel ore exports, encouraging domestic refinery construction.
• 2018: A nickel processing facility began operating across Weda Bay.
• 2021 to 2023: Three children drowned in polluted waters near Baliara village, according to Mighty Earth.
• 2022: Internal tests found chromium levels in Kawasi springs at 19 times legal thresholds. The US Inflation Reduction Act also introduced traceability requirements tied to vehicle tax rebates.
• 2023: Indonesia's nickel industry consumed roughly 100 billion kilowatt-hours of electricity.
• June 2025: Bappenas launched its emissions roadmap, and the Environment Ministry sanctioned IMIP.
• August 2025: Floodwaters covered Patapata's neighborhood in Kobe for six days.

Julfikar Sangaji of the Mining Advocacy Network argues that enforcement measures are insufficient and calls for projects to be postponed until proper safeguards exist. He described the developments as a threat to the lives of local residents:

Who needs all these projects? We don't," he said. "This feels like an apocalypse looming over our lives.

As of March 26, 2026, Indonesia's nickel industry stands at the meeting point of global demand for electric vehicles and local demands for clean water, secure land and safer livelihoods. Production limits, sanctions and renewable energy commitments address parts of that problem, while residents continue to live with the damage already done.

The Bottom Line

• Indonesia produces approximately 2.2 million tonnes of nickel annually, with its share of global supply described as nearly 40 percent and also approximately 60 percent.
• Weda Bay hosts 18 refineries and 11 power plants burning coal across mining concessions covering 2,560 square kilometers.
• Coal supplies 97 percent of electricity for nickel processing. Each tonne of nickel suitable for batteries generates an estimated 93 tonnes of carbon dioxide equivalent.
• Communities in Halmahera, Kabaena and Obi face forest loss, flooding, polluted water, reduced fishing access and pressure over land sales.
• Chinese investment dominates the sector, while major global automakers face demands to trace nickel to individual mines.
• Indonesia cut its 2025 mining quota by about 44 percent, sanctioned IMIP and revoked four mining licenses in Raja Ampat.
• Bappenas targets an 81 percent reduction in nickel industry emissions by 2045, while IWIP's planned solar and wind projects have no clear operational timetable.