As Southeast Asia’s largest economy looks to increase local processing and refining capacity of the material, which is essential for electric vehicles, an Indonesian nickel manufacturer has revealed plans for a $1.8 billion factory.
Although Indonesia has the greatest nickel reserves in the world, the country only contributes a little amount to the refining process; the government is working to rectify this.
This week, PT Merdeka Battery Materials announced that it had inked contracts to build a high-pressure acid leach plant on the island of Sulawesi, which will extract nickel and cobalt from ore.
Work on the project, which is partially funded by a $1.4 billion loan, is anticipated to start in January and be finished in 18 months.
One of the largest nickel production hubs in Southeast Asia, Indonesia Morowali Industrial Park in Sulawesi, is where the plant will be constructed.
Unrest about wages and working conditions in Chinese-run or funded factories has been exacerbated by China’s increasing investment in nickel, a basic metal used in stainless steel and electric car batteries.
After 18 people were killed in an explosion at a Chinese-funded nickel processing company in the same industrial park in 2023, hundreds of Indonesian workers demonstrated against the working conditions there.
In some areas of Indonesia, nickel mining has also been connected to rights violations and deforestation, especially involving Indigenous groups.
After Indonesia ceased exporting raw nickel in 2020, domestic nickel processing took off, attracting significant Chinese investment to construct smelters.
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