Foreign-backed nickel hub in Indonesia causing mass deforestation -report

JAKARTA, (Reuters) - Mining activity at a nickel industrial park linked to mainly Chinese companies has contributed to mass deforestation in Indonesia, a nongovernmental group said in a report.

The report of ecological damage in the nickel industry comes as Indonesia, home to the world’s largest nickel ore reserves, seeks to extract more value from the mineral by attracting investment into its processing and in the manufacturing of electric vehicle batteries.

The country has also set a production target of some 600,000 electric vehicles (EV) by 2030 - more than 100 times the number of EVs sold in Indonesia in the first half of 2023.

In the report released on Wednesday, U.S.-based Climate Rights International (CRI) documented activity at the Indonesia Weda Bay Industrial Park (IWIP), one of the country’s largest nickel processing hubs, whose investors include China’s Tsingshan Holding Group and France’s Eramet ERMT.PA.

The operator of the park, on Halmahera island in the Maluku region, is a joint venture between China’s Zhejiang Huayou Cobalt 603799.SS, Zhenshi Holding Group and Tsingshan.

IWIP, Tsingshan, Eramet, Huayou, Zhenshi and the forestry ministry did not respond to Reuters’ requests for comment.

CRI said companies, which had permits, have cut down more than 5,300 hectares of tropical forest within the park’s concession since 2018, citing geospatial analysis of satellite imagery conducted by the group and researchers at the University of California, Berkeley, in the United States.