As a country with the largest nickel reserves in the world, Indonesia attracts many foreign companies to open and expand its factories in Indonesia, especially after the government signed a regulation banning the export of unprocessed nickel and bauxite ores, one of which is Tesla. This news was confirmed by the Minister of Industry, Agus Gumiwang. He stated that based on the ongoing discussions between Tesla and the government, they would direct their battery factory to Batang, Central Java.
In case you did not know, nickel is a critical ingredient in making batteries for Tesla electric cars. As the most crucial metal in lithium-ion batteries used to power EVs, Nickel is set to play a vital role in the world's low-carbon future. However, what nickel gives with one hand, it takes away with the other. Cited from Verisk Maplecroft, notable international affairs focus on human rights, sustainability, and ESG issues, Nickel intensive processing uses more energy, pollutes more water, and negatively impacts biodiversity.
On 11 January 2014, Indonesian former President Yudhoyono signed a regulation banning the export of unprocessed nickel and bauxite ores. The ban was rolled back in 2017. Still, the deadline was moved back to January 2020. With this export ban, the government intended for Indonesian firms to enter the supply chain for lithium batteries, which utilizes nickel in its production.
Luhut Pandjaitan said that Indonesia's large nickel reserves were one reason Tesla wanted to build a factory; CNBC Indonesia stated that President Jokowi had previously ordered the clearing of 4,000 hectares of land PTPN IX in Batang.
The first phase is opened with an area of 450 hectares so that the hope is that Indonesia will be more competitive in welcoming investors with good and competitive services. As reported from detik, Tesla is predicted to produce electric cars will amount to 3.8 million units in 2025. Some even say that the figure of 5 million units depends on the development of factories they are doing in several countries.
The average Tesla car needs 55 kg of nickel (for comparison, the Tesla Model S needs about 75 kg of nickel for its battery) to meet the 5 million electric car production needs in 2025. In that case, they will need 275 million kg (275,000 tons) of nickel; that's a considerable amount of nickel.
In a conference call for Tesla Q2 meeting, Tesla's chief executive Elon Musk has said he plans to offer a "giant contract for a long period of time" as long as the nickel is mined "efficiently and in an environmentally sensitive way."
That being said, back In 2017, Philippines, the world's second-biggest nickel producer, ordered the closure of 23 mines, mainly nickel producers that account for about half of the world's top nickel ore supplier. These mines were accountable for polluting rivers, wells, and farmland, exacerbated by water scarcity.
According to the study from Verisk Maplecroft, Nickel production uses more energy as vast amounts of energy are consumed during mining, drying, acid leaching, and refining. Laterite production also requires acid leaching, consuming sulphuric acid and ammonia, threatening the surrounding water quality and biodiversity.
While the government's goal is to boost economic growth, that goal must be balanced with respect for our environment. It only makes sense that vehicles that plan to reduce carbon emissions are manufactured sustainably. Otherwise, as the activist Pius Ginting says, "the net result is we have clear air in our cities, but then we destroy a rich biodiversity area."