Indonesia leads global nickel production, used in electric vehicle batteries, but locals face pollution and ecological harm.

BANDUNG, Indonesia – With abundant resources of critical minerals, Indonesia is the world’s top producer of nickel, a metal considered crucial to meeting global demand for electric vehicle batteries.

Last year, it produced around 2.2 million tonnes, or nearly 60% of global output of the metallic element, according to the United States Geological Survey in March.

The largest country in Southeast Asia, Indonesia has a ban on exporting nickel ore, requiring raw materials to be processed into products domestically to maximise economic returns and jobs from its vast mineral wealth.

But environmental activists say there is a catch. Indonesia is also home to much of the world’s biodiversity, and its tropical forests, coastal mangroves and other natural treasures are under threat from mining.

Why is demand for Indonesia’s nickel increasing?

As the global transport sector shifts from fossil fuels to clean energy, global demand for EV batteries has been rising sharply – up 25% between 2023 and 2024, the International Energy Agency (IEA) has said.

The use of nickel in EV batteries is increasing, with the share rising from just 2% in 2017 to 10% in 2022, according to IEA data.

Other countries are stepping up efforts to secure a critical mineral supply, including the European Union’s Critical Raw Materials Act and U.S. President Donald Trump’s deal with Ukraine on preferential rights to extraction.

Indonesia’s nickel sector has rapidly expanded in response to global demand, with non-tax revenue jumping from 35 trillion rupiahs ($2.1 billion) in 2020 to 172 trillion rupiahs in 2023, according to the Ministry of Energy and Mineral Resources.