Nickel Mining in Indonesia
An overview of socioenvironmental governance in the sector
This case study is part of a broader project focused on strengthening supply chain resilience through analysis of the environmental and associated social impacts of critical minerals using case studies of nickel, lithium, and copper. It describes Indonesia's environmental challenges and associated social issues from nickel mining of laterite ore and processing through high-pressure acid leaching (HPAL) and examines the country's policy measures for management.
Key Messages
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Indonesia has invested significant resources into leveraging its nickel endowments for economic development. The use of HPAL to process low-grade laterite ore continues to grow in scale—such intense development is associated with significant environmental and social impacts.
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Nickel laterite mining and processing have a larger environmental footprint and generate more waste per tonne of metal produced than nickel sulfide mining. And much of the energy consumed in this process in Indonesia comes from coal, resulting in higher greenhouse gas emissions.
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Stringent legislative frameworks are needed to address mining-related issues such as tailings and water management, which have potential for significant impacts on the environment and society.
Indonesia has the world’s largest nickel reserves, with an estimated 55 million tonnes. It has been the world’s leading producer of nickel over the past few years, with a global production share of 16% in 2017 rising to 54% in 2023, when it produced 2.02 million tonnes of nickel.
The conclusions and lessons learned from this case study can be used to guide more sustainable nickel laterite mining and processing in Indonesia as well as other jurisdictions.
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