Since 2008, the development of nickel mines and the opening of two smelters and coal-fired power plants has dramatically changed the village of Kawasi in Obi Island . In just 14 years, a community that was living without electricity and mainly reliant on fisheries has been industrialised and is now suffering the impacts of mining and smelter pollution . The local population already reports increased levels of respiratory infections and is concerned for the safety of their drinking water and the state of local fisheries .
Melky Nahar, a campaigner with JATAM, explains the core of the conflict by denouncing that the Indonesian government is “concerned with the interests of mining companies, as well as companies engaged in refining processing, but ignore the future of the people on Obi Island” .
The accelerated industrialisation of what once was a remote rural island is the consequence of national and global trends that are sparking similar conflicts throughout the region . The combination of a growing appetite for critical minerals of the global battery manufacturing industry, China’s domination of the nickel commodity chain, the expanding influence of its companies in Southeast Asia and Indonesia’s industrial development aspirations have led to the rapid development of mines and smelters all over the country in recent years.
Significantly, the two companies that have signed long-term agreements to purchase minerals from Kawasi’s largest smelter, Easpring and GEM, supply raw materials for battery manufacturers. Most notably, since GEM supplies CATL, the chinese-owned company that controls 30% of the global battery market, nickel from Kawasi will ultimately make its way to electric vehicles (EV) of brands including Mercedes-Benz, Volkswagen, BMW, Volvo, Tesla, Daimler, Toyota, Hyunday, Honda, MG, Roewe, Feifan, Beijing, Arcfox, Geometry, Zhidou, Zeekr, Lynk & Co, Maple and Trumpchi . Both Easpring and GEM are highly aligned with the Chinese national agenda. Easpring's stated goal is to “contribute to the era of ecological civilization”, a concept enshrined in the Chinese constitution in 2012 . In turn, GEM mentions that the 14th Five-year Plan tasks the company with “establishing a green supply chain [...] across the globe” following a development strategy focused on “urban mining and new energy materials” .
China dominates the nickel commodity chain and has the highest nickel smelting capacity worldwide. But since 2016, nickel smelting capacity has boomed in Indonesia, the country with the largest nickel reserves and mining output, and is closely approaching China’s output . This nickel smelting rush has been mostly financed by Chinese companies and includes seven more HPAL refineries planned across Indonesia . In turn, these investments are the result of Indonesia’s strategy of industrial development, including a nickel ore export ban in 2014, to gain added value selling the processed metal instead of the raw nickel ore . In the long term, the government intends to drive economic growth and development by developing a domestic integrated EV supply chain, from mining and smelting, to manufacturing of batteries and cars .
But Indonesia faces a notable challenge in developing a domestic industry along the EV supply chain, chiefly its lax environmental regulations. Particularly, the EV industry market is notoriously demanding on social and environmental standards. In a bid to satisfy their customers, car-makers such as Ford, BMW and Daimler-Benz have joined the global Initiative for Responsible Mining Assurance to “protect people and the environment directly affected by mining” . Accordingly, the promoters of the Kawasi project also boast their green credentials claiming they are “minimising the use of fossil energy sources in the production processes [...] through implementation of low emission technology” . These claims contrast with the installation of a combined 720MW of coal-fired power to supply the smelting operations and the appalling environmental record reported by the local population and researchers on the ground .
Most strikingly, local campaigners denounce that the mines and refineries at Kawasi are dumping their waste products directly into the sea, in a practice known as deep sea tailing placement (DSTP) . The practice is not unique to Kawasi and has been reported in other sites in Indonesia with the approval of the government. Campaigners denounce that such practice can have potentially devastating effects for wildlife in a biodiversity-rich area making “EV batteries part of the global ecology problem and contribute to new sources of coastal and marine pollution” .
The impacts of DSTP on the local environment are already taking a heavy toll on the daily lives of the local population. Kawasi fishermen report that the catches have significantly decreased and they have to sail further away to find fisheries to sustain their families. In addition, scientists have also reported dangerous levels of heavy metals in local fish and shells often consumed by villagers . “My presumption is simply that the Kawasi Sea isn’t suitable anymore for wildlife … It’s turned into a mud puddle. So if the fishermen say they can’t find fish anymore, that’s because they’re gone. The people of Obi Island could die … from eating the contaminated fish” said Muhammad Aris, a co-author of the study and marine biologist at Khairun University.
Dangerous levels of contaminants, including the cancerogenic hexavalent chromium (Cr6), have also been found in drinking water supplies . Local people are already denouncing that since the mines arrived they fall sick more often. The local midwife clinic has already reported 900 cases of potentially deadly acute respiratory infections among the 4000 inhabitants, a ratio that more than doubles the national average. Most of the reported cases have been in newborns and toddlers .
DSTP is a cheaper waste disposal alternative than tailing dams on land and the cost of nickel production would significantly increase if the Kawasi plants were to change its waste treatment practices . The Chinese investors capacity to produce battery-grade nickel at record low monetary cost and time  is therefore reliant on imposing significant environmental costs to the local populations, all the while the government disregards environmental regulations with a central focus on GDP expansion . The injustice is only made worse considering the political alienation denounced by Nurhayati, a Kuwassi woman leader: “The people heard that the pipe would be used for [sea] waste disposal, but we were never invited to talks” .
Environmental justice organisations have a radically different development proposal and advocate for alternative modes of investment. “Coastal communities who take care of natural resources and the environment so that there is no ecological crisis and destruction of biodiversity is [...] a big investment that their children and grandchildren can enjoy in the next 100 years, unlike a company investment that will only be enjoyed for a few years" - Ki Bagus Hadikusumo, Jatam campaigner .
|Name of conflict:||Nickel rush threatens the health and environment of Obi Island's people, Indonesia|
|State or province:||North Maluku|
|Location of conflict:||Kawasi, Obi, South Halmahera Regency|
|Accuracy of location||HIGH (Local level)|
|Type of conflict. 1st level:||Mineral Ores and Building Materials Extraction|
|Type of conflict. 2nd level:||Tailings from mines|
Thermal power plants
Aquaculture and fisheries
|Specific commodities:||Nickel and Cobalt|
In 2008, mining operations began in Obi Island after South Halmahera Regent issued exploration permits for nickel mining . At the Kawassi site two subsidiaries of the Harita Group, PT Trimegah Bangun Persada (TBP) and PT Gane Permai Sentosa (GPS) operate mines and extract limonite and saprolite ore containing low concentrations of nickel (<1.6%) . The mines have a governmental permit to dump 6 million tons of waste into the ocean each year .
In 2016, the Megah Surya Pertiwi Smelter was completed . The smelter is a joint venture between Harita Group (20%) and two subsidiaries of Xinxing Ductile Iron Pipes Co., Ltd. (80%) and supposed an investment of $320m . The smelter uses the Rotary Klin Submerged Arc Furnace (RK-SAF) technology to produce 190,000 tons/year of ferronickel (10-12% purification)  and can also process nickel ore from other mines in the region . Ferronickel is used in the production of steel. The smelter is powered by a 114 MW coal-fired power plant .
In 2021, the first phase of a larger smelter was put online. This second smelter uses the High-Pressure Acid Leaching (HPAL) technology, which smelters nickel from ore applying sulphuric acid in high temperature high pressure chambers . This technology gives an output of better quality than the first pyrometallurgical smelter, making nickel of sufficient quality to be used in the manufacturing of electric vehicle batteries . A second phase of the smelter is expected to be put in operation on the third quarter of 2022 and a third phase in 2023 . When the smelter is completed it will have capacity to produce 96,000 tons/year of mixed Ni/Co precipitate (MHP), 160,000 tons/year of nickel sulphate and 20,000 tons/year of cobalt sulphate . The smelter is powered by a 600MW coal-fired power plant  and receives supplies of 5.05 million wet metric tonnes (WMT) of limonite ore and 158,000 WMT of saprolite ore from the local Harita Group mines .
The HPAL smelter is operated by PT Halmahera Persada Lygend, a joint venture between Harita Group (63.1%) and Lygend Resources & Technology Co. (36.9%) . The project supposes a total investment of $1.05 billion, $625 million of which is financed by a consortium of 10 banks including the European BNP Paribas, Indonesian and Singaporean banks . Lygend and Harita have already signed agreements to supply MHP, nickel and cobalt sulphate to GEM Co. and Beijing Easpring Material Technology Co., two chinese companies specialised in minerals for electric vehicle battery manufacturing .
Before 2024, PT Halmahera Jaya Feronikel, another joint venture of Lygend and Harita Group, planned to build a third smelting plant. This smelter will produce 280,000 tons/year of ferronickel using the Rotary Kiln-Electric Furnace (RKEF) technology .
|Level of Investment for the conflictive project||1,370,000,000|
|Type of population||Rural|
|Start of the conflict:||01/01/2008|
|Company names or state enterprises:||Lygend Resources & Technology Co. from China - Joint owner (36.9%) of the HPAL refinery |
XinXing Qiyun Investment Pte Ltd from Singapore - Joint 80% owner of Megah Surya Pertiwi Smelter
Harita Group from Indonesia - Harita Nickel, a subsidiary of Harita Group, owns and operates the nickel mines; it owns 20% of the Megah Surya Pertiwi smelter; and 63.1% the HPAL smelter.
GEM Co., Ltd. (GEM) from China - Buys the battery-grade nickel and cobalt from the HPAL smelter in Kawassi
Beijing Easpring Technology Material Co., Ltd. (Easpring) from China - Buys the battery-grade nickel and cobalt from the HPAL smelter in Kawassi
|Relevant government actors:||Ministry of Maritime Affairs and Fisheries (KKP), Government of Indonesia|
Ministry of Environment and Forestry (KLHK), Government of Indonesia
Coordinating Ministry for Maritime Affairs and Investment (KKBKI), Government of Indonesia
|International and Finance Institutions||OCBC Bank Singapore (OCBC) from Singapore - Part of investment consurtium providing $625m for HPAL smelter|
United Overseas Bank (UOB) from Singapore - Part of investment consurtium providing $625m for HPAL smelter
Bank Negara Indonesia (BNI) from Indonesia - Part of investment consurtium providing $625m for HPAL smelter
DBS Bank Singapore (DBS) from Singapore - Part of investment consurtium providing $625m for HPAL smelter
Bank Mandiri from Indonesia - Part of investment consurtium providing $625m for HPAL smelter
BNP Paribas (BNP) from France - Part of investment consurtium providing $625m for HPAL smelter
Bank Central Asia (BCA) from Indonesia - Part of investment consurtium providing $625m for HPAL smelter
Maybank from Malaysia - Part of investment consurtium providing $625m for HPAL smelter
Oversea-Chinese Banking Corporation (OCBC) from Singapore - Part of investment consurtium providing $625m for HPAL smelter
OCBC NISP from Indonesia - Part of investment consurtium providing $625m for HPAL smelter
|Environmental justice organizations (and other supporters) and their websites, if available:||Front Perjuangan Rakyat Obi (FPRO) [Obi People's Struggle Front]|
Jaringan Advokasi Tambang Sulawesi Tengah (JATAM Sulteng) [Mining Advocacy Network Central Sulawesi]
Aksi Ekologi & Emannsipasi Rakyat [Action for Ecology and People’s Emancipation]
Koalisi Rakyat untuk Keadilan Perikanan (KIARA) [People's Coalition for Fisheries Justice]
Wahana Lingkungan Hidup Indonesia (Walhi) [Indonesian Forum for the Environment] - Friends Of the Eartg affiliate
|Intensity||MEDIUM (street protests, visible mobilization)|
|Reaction stage||In REACTION to the implementation (during construction or operation)|
|Groups mobilizing:||Local ejos|
|Forms of mobilization:||Community-based participative research (popular epidemiology studies, etc..)|
Development of a network/collective action
Involvement of national and international NGOs
Media based activism/alternative media
Official complaint letters and petitions
|Environmental Impacts||Visible: Loss of landscape/aesthetic degradation, Deforestation and loss of vegetation cover, Surface water pollution / Decreasing water (physico-chemical, biological) quality, Groundwater pollution or depletion, Mine tailing spills, Global warming, Food insecurity (crop damage)|
Potential: Biodiversity loss (wildlife, agro-diversity), Reduced ecological / hydrological connectivity, Air pollution
|Other Environmental impacts||Dangerous levels of hexavalent chromium (Cr6) present in drinking water (Visible)|
Decrease in fisheries (Visible)
|Health Impacts||Visible: Infectious diseases|
Potential: Exposure to unknown or uncertain complex risks (radiation, etc…)
|Other Health impacts||Elevated levels of lung infection, especially in newborns and todlers (Visible)|
|Socio-economical Impacts||Potential: Loss of traditional knowledge/practices/cultures, Loss of livelihood|
|Project Status||In operation|
|Conflict outcome / response:||The project operator has pledged to stop dumping waste into the sea, and instead clear a forest in the island for a tailing dam. Campaigners say is not a better solution. |
|Do you consider this an environmental justice success? Was environmental justice served?:||No|
|Briefly explain:||Nothing has notably changed in Kawassi and the industry continues operating and planing to expand the project with additional smelters.|
|References to published books, academic articles, movies or published documentaries|
|Related media links to videos, campaigns, social network|
The waters off the southern coast of Obi Island have turned red due to pollution from the nickel mines and smelters.
Credit: Rabul Sawal for Mongabay Indonesia. Photo retrieved from: https://news.mongabay.com/2022/02/red-seas-and-no-fish-nickel-mining-takes-its-toll-on-indonesias-spice-islands/
Satellite Image Timeline
Retrieved from GoogleEarth, own composition
The waters off the southern coast of Obi Island have turned red due to pollution from the nickel mines and smelters.
Photograph by Rabul Sawal/Mongabay Indonesia.
Protest by Front Perjuangan Rakyat Obi (FPRO) [Obi People's Struggle Front]
The banner reads: "Maluku Utara Bukan Toilet. Hentikan Tambang Dan Proyek Pembungan Tailing Di Kepulauan Rempah-Rempah" ["North Maluku is not a toilet.
Stop Mines And Tailing Projects In The Spice Islands "]
Land and forest around Kawasi are occupied by the mining company
Photograph: Adlun Fiqri Pramadhani/The Guardian