TEMPO.CO, Jakarta - Indonesia is blessed with abundant natural resources. After timber, crude oil, coal, and palm oil, now there is nickel. The world needs renewable energy, and in particular batteries that emit far fewer greenhouse gases in use than oil, gas or coal. One of the key components of batteries is nickel ore.

With these natural resource commodities, in two years the Indonesian economy was saved. At least, during the global crisis caused by the Covid-19 pandemic and the Russia-Ukraine war, Indonesia’s trade balance was in surplus. Since 2020, the value of Indonesia’s exports has been 29 times larger than the value of imports. Helping the trade balance are non-oil and gas commodities such as coal, palm oil, including nickel

As a result of this trade surplus, the rupiah exchange rate has not been under pressure. Therefore, the value of our exports should be reflected in our foreign currency reserves. However, compared to the 2021, our foreign exchange reserves fell by around US$8 billion. What has happened? Who has enjoyed the proceeds of all these exports?

Based on these figures, we went to the field, to the Indonesian nickel centers, namely Central Sulawesi and Southeast Sulawesi. There, dozens of nickel mining companies extract the ‘new gold’ on a massive scale. But astonishingly, they do not have forestry area use permits.

These companies claim that they mine in areas designated for other uses that do not need a permit from the environment and forestry minister. But analysis of satellite images shows that their mining locations are inside protected forests or restricted production forests. This means that the mining there needs a permit.

Mining in the forest also makes sense because that is where most nickel reserves are located. The nickel content is 1.8 percent or above. This means that one ton of extracted soil contains 18 kilograms of nickel ore. In the last three years, nickel has been extracted from 5,000 hectares of forest. This is massive deforestation.

Therefore, if nickel is going to prevent the climate crisis, the mining of it is an oxymoron because deforestation is another cause of the climate crisis: it reduces absorption of carbon emissions. If Indonesia does not see the benefit of these exports in the form of increased foreign currency reserves, and if the environment is also damaged, what do we actually obtain from these natural resources?

We should learn from what happened in the United States in the 19th century when natural resources and the economic proceeds of them were enjoyed by the ‘robber barons’, tycoons who were able to get around the law. Indonesia must not suffer an even worse fate because of people responsible for these violations being protected by the government regulation in lieu of law on job creation that prioritizes administrative sanctions over criminal proceedings.

Enjoy the magazine

Bagja Hidayat

Executive Editor

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How do mining companies launder illegal nickel?

The Value of the Nickel Economy

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Interview with the Energy Minister

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