The ocean waters surrounding eastern Indonesia and Papua New Guinea lie within the biodiverse Coral Triangle, home to some of the world’s most highly concentrated – and endangered – coral reefs. In addition to being globally significant ecological sites, the reefs supply habitat for several important commercial and subsistence fisheries central to local communities’ lives.
Meanwhile, the area’s nickel deposits are attracting the attention of electric vehicle manufacturers, which rely on batteries containing nickel and other minerals like lithium and cobalt. Nickel demand is expected to increase six-fold by 2030 and Indonesia, which is already the world’s largest nickel producer, is dramatically scaling up production to meet it.
But it will require an about-face on a pollution problem that has plagued the country’s mining sector for years: deep sea disposal of mine waste, known as tailings. Indonesians have long opposed the practice, citing evidence that the tailings would decimate fragile reefs and strain fisheries already suffering the impacts of the coal plants used to power existing operations.
Tesla CEO Elon Musk famously promised a “giant contract” to any company able to source nickel “efficiently and in an environmentally sensitive way”. Earlier this month, Tesla submitted an investment proposal to the Indonesian government. The next day, the country announced that new mining projects would not be permitted to dump waste into the ocean.
Tesla’s move shows the power that companies have to demand responsibly sourced minerals in their products. They must use this power to ensure that the path to a clean energy economy isn’t littered with mine waste and human rights abuses.
Each year, mining companies dump over 220 million tons of hazardous mine waste, known as tailings, directly into oceans, rivers and lakes. Tailings are the sludge that remains once the mineral is extracted from the ore. They contain processing chemicals and naturally occurring elements such as arsenic that become toxic when exposed to air or water. This dangerous cocktail smothers fragile organisms living on the seafloor. The tailings can also spread, contaminating sea life consumed by residents and destroying coral reefs and other habitats.
Ocean dumping is a cheap and convenient way to dispose of mine waste, but it has been phased out or prohibited in most parts of the world due to its environmental and health impacts. Some mining companies still want to do it, a few governments still allow it, and the world’s largest banks and investment firms still profit from it.
If Indonesia follows through with its promise to move away from ocean dumping, two major projects, one an expansion of the Indonesia Morowali Industrial Park and the other a new processing facility on Obi Island, must develop safer plans to manage tens of millions of tons of waste. Chinese companies are backing both projects, which play a role at nearly every point of the nickel supply chain, from mine to factory.
While it is exciting to take Indonesia off the list of places willing to permit ocean dumping, it’s important to point out that the decision only applies to new mines. The world’s largest ocean-dumping mine – Newmont Mining’s Batu Hijau project – is in Indonesia and there’s no sign of that changing. Existing and planned mines in neighbouring Papua New Guinea have similar pollution problems.
Viable and affordable alternatives for managing tailings are proven and broadly employed across the mining industry. And by improving the efficiency with which we use and reuse existing mineral supplies, we can minimise the need for additional mining.
The financial sector is also responding. Citigroup, Standard Chartered and Credit Suisse have prohibited or severely restricted financing for ocean dumping. Leading Norwegian asset manager, Storebrand, recently divested from Metallurgical Corporation of China over unacceptable environmental damage at the Ramu nickel and cobalt mine, which dumps millions of tons of mine waste into Coral Triangle waters each year.
The climate and clean air benefits of electric vehicles should not come at the cost of marine and land biodiversity in remote areas, marginalising the lives of residents and workers. Companies looking to profit from clean technology must use their market power to ensure the mined materials used in their products are sourced responsibly, whether it’s nickel from Indonesia, cobalt from the Democratic Republic of Congo, or lithium from Argentina.
Doing so will give them a marketing edge. Tesla is not the only company with customers that demand sustainable products. Pressure is mounting from consumers and investors to ensure that mineral sourcing for electric vehicle batteries and other low-carbon technologies is as responsible as possible. Failing to get ahead of this issue could damage cleantech companies’ reputations – or worse, the reputation of the clean energy transition itself. And that, as the climate models indicate, would be catastrophic.
This article originally published on China Dialogue and written by Pius Ginting and Payal Sampat.