Foreign-backed nickel hub in Indonesia causing mass deforestation: Report

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JAKARTA — Mining activity at a nickel industrial park linked to mainly Chinese companies has contributed to mass deforestation in Indonesia, a non-governmental 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 (Jan 17), US-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.

The operator of the park, on Halmahera island in the Maluku region, is a joint venture between China's Zhejiang Huayou Cobalt 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.

That is roughly the size of over 6,000 football pitches.

Experts have raised concerns the nickel industry could worsen deforestation in Indonesia, a resource-rich country that is also home to massive rainforests.

After years of rampant deforestation, Indonesia has had success in slowing the rate at which forests are cleared for plantations and other industrial activity.

From 2020 through 2022, Indonesia reduced its average primary forest loss by 64 per cent compared with 2015-2017, showed data from research group World Resources Institute.

CRI also estimated carbon dioxide emissions from deforestation were "roughly equivalent to the annual emissions of 450,000 cars."

President Joko Widodo told Reuters last year Indonesia would increase scrutiny of miners and order companies to manage nurseries and reforest depleted mines.

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