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30 Nov 2019

Arianto Sangadji, Muh Fardan Ngoyo, Pius Ginting, Rosa-Luxemburg-Stiftung

(Report) Road to Ruin: Challenging the sustainability of nickel-based production for electric vehicle batteries

[...]Amid discussions on electric vehicles as vital to climate solutions in the transport sector, it is crucial to situate the material footprint of the car industry against the promised decrease in carbon emissions by this shift.

Particularly, Indonesia is increasing its stakes in the resource-based market as a major player in the global supply of nickel, an important component of the batteries used for electric vehicles. It has rolled out a national plan for developing its domestic processing industry, which began by enforcing an export ban on raw minerals. [...]The export ban benefited only those that had huge capital to begin with, including mostly Chinese-owned firms, to build smelters and additional plants in the country. This policy drastically attracted foreign direct investments in specially designated economic sites, one of which is the Indonesia Morowali Industrial Park (IMIP) in Central Sulawesi where most of these big mining business license holders operate.

[...]The park is a testament to the resurgence of China as an economic powerhouse with a ravenous appetite for cheap raw materials, new energy sources, reserves for foreign exchange, and ever more remunerative frontiers. Though unofficial as of yet, the IMIP would function to integrate Indonesia into China’s Belt and Road Initiative, arguably the modern world’s largest financial undertaking aimed at multilateral cooperation and supposedly sustainable development. [...]

Examining the value chain production of nickel in the IMIP, this study aimed to shed light on the various compromises dealt when such a project of global capital as electric vehicle production is put forward as both a climate solution and a driver for development. The findings, in particular, revealed how the local environment of Morowali and the residents ultimately stand at the losing end of this industrial development amid the disastrous consequences of resource extraction. Labor tensions in the park have also been documented and paint an ironic picture of overworked, low-wage workers deterred from protesting booming businesses.

An industry that only entrenches labor exploitation, economic injustices, and environmental degradation serves to undermine the socio-ecological transformation promised by a shift towards electric vehicles.