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If you drive an electric vehicle, chances are you're relying on nickel every time you get behind the wheel. The metal is a crucial ingredient in ev batteries, and these days a lot of that nickel comes from Indonesia, specifically the island of Sulawesi.
So the island of Sulawesi is gigantic. It's in the eastern half of Indonesia. It's kind of shaped like a claw. It has several peninsulas that all shoot off from the central land mass, with amazing beaches, huge mountains, volcanoes. This pretty amazing place from a geographical perspective.
Matt Campbell is Asia editor of Bloomberg BusinessWeek. He went to Sulawesi last winter because despite being rugged and remote, the island is now in a central role in the global economy.
It is just about the most important place in the world for the nickel industry. There are huge nickel deposits in Silosi, and the nickel is being processed there. It's being refined into more usable form so that it can be put into, among other things, electric vehicle batteries.
The nickel industry has brought rapid economic growth and tons of jobs to Indonesia, But according to reporting from Matt and his colleague Annie Lee, the processing of this nickel has real consequences for the workers in the factories and for the people who live nearby.
We found evidence of really horrific industrial accidents that have been occurring repeatedly, over and over again for years now.
Many of these incidents involved what's called slag, the waste leftover from smelting nickel.
Almost anything you can think of it's happened. So people buried under landslides of slag, people falling into pools of molten slag which are incredibly hot and burning to death, people being run over by forklifts. Safety standards that would not be accepted anywhere in the developed world. And this is something that the ev industry, battery manufacturers, battery materials suppliers, and ultimately car companies have collectively turned a blind eye to and certainly not acted to stop.
Welcome to The Big Take Asia from Bloomberg News. I'm Janet Paskin. Every week we take you inside some of the world's biggest and most powerful economies and the markets, tycoons and businesses that drive this ever shifting region. Today on the show The Dirty, dangerous and sometimes deadly Cost of the ev Revolution, Indonesia has far and away the world's largest nickel reserves. The Indonesian government has made it a national priority to develop the nickel industry.
The big policy change was in twenty fourteen when the government actually banned the export of raw nickel ore so they said, if you want to mine Indonesia nickel, you have to do the smelting and refining here rather than overseas, because we want to generate employment. Since then, there have been things like tax incentives, help with infrastructure, help with security.
Last year, Indonesia accounted for almost half of the world's nickel supply. By twenty thirty, it's estimated to reach two thirds. But all this success comes at a cost. We heard about the experience of one family who had a relative in the industry, from a woman named Nielu Novi Barniardi Rightia.
Good afternoon. My name is Nilu Novi Barniarti. I am twenty eight years old and I am a housewife.
So Nilu nov Barney Arti is the sister of a young man named Imada Defriy Hari Jonathan, who was twenty years old. He was working as a trainee at a place called Gunbuster Nickel Industry, which is a large nickel smelting facility.
Tell me just a little bit about Gunbuster.
So Gunbuster is owned by a Chinese company called Jiangsu DeLong. They have set up this big industrial park. It's in a really a valley between a bunch of mountains with the water on the other side, and it just looks it looked like mortar from the Lord of the Rings. When you go up and look at it, it is just this dark, smoky, dirty place. There's dust, there's pollution erupting from this verdant, green, tropical landscape. It's really astounding.
Jonathan's sister told us that they knew working at Gunbuster could be dangerous.
Yes, we knew the risk of working in a mine is higher than working in a village like here. When he went to work there, he was wont to avoid working in the furnace, and he was not assigned to the furnace. Our family relatives say he was very lucky to get assigned to the hoist crane because the location was nice with air conditioning and not in the furnaceku.
His sister said, Jonathan was happy with his salary. He was making more than he had at a motorbike repair shop in the village, and he talked about wanting to build a house for their parents. But less than two months after Jonathan started working at Gunbuster, something went wrong.
He was working in what's called a hoist crane, so if you can imagine a big industrial space, not a crane in the sense of a crane that builds a building, but a crane that is sort of on a railing, on the ceiling, and he was in the cab of this crane with a coworker, Nirwana cele who was actually a bit of a social media celebrity. She had a big following on TikTok with these cheerful videos about working in a nickel smelter, which a lot of people watched and a lot of people liked. And there was coal
dust in this space where they were. Something a spark or something happened that caused the coal dust to catch fire. There was a really severe fire, and Jonathan and Nirwana were in the cab of this crane, could not escape and they burned to death.
When you talked to Jonathan's family, how are they holding up?
They were not as angry as I expected them to be. Actually, they were in this case resigned or fatalistic to some extent, in a this happened and it's nobody's fault kind of way.
Gunbuster arranged to return Jonathan's body to his family. He was laid to rest on December twenty sixth, his mom's birthday. The company also gave the family money Jonathan's salary plus compensation for his death. In total, it was about thirteen million rupia or eight hundred twenty four US dollars for them.
It is not a tiny amount of money. But Jonathan's father said to me that they haven't spent it, that they've just kept it in the bank because and I asked why, why couldn't you spend it? And he said, because the money is like Jonathan's body, How could we spend it.
After Jonathan and Celley died, workers at Gunbuster held a one day strike to protest the conditions there. Protesters and security officers clashed during the demonstration, two workers were killed. In a statement, Gunbuster said that employee welfare is the company's utmost concern that it complies with safety rules and is seeking to improve conditions, but it also says that work accidents are a risk that can occur in various
industries and work situations without exception. Trend Asia, a non governmental organization based in Jakarta, keeps track of deaths in Indonesia nickel facilities. From twenty fifteen to twenty twenty two, the group recorded about eight fatalities a year on average. In twenty twenty three alone, there were at least seventeen
A few hours drive from Gunbuster. At a massive nickel industrial complex called the Indonesia Morawali Industrial Park or IMMEIP, a group of Chinese and Indonesian workers were killed in an explosion in the early morning of last Christmas Eve.
Thirteen people have died and dozens more are injured after an explosion at a nickel plant in Indonesia.
The blast occurred early Saturday, but the fire was distinguished only on Sunday.
Twenty one people dead thirteen Indonesians, eight Chinese, which even by the standards of industrial accidents in developing countries, is an astounding death toll and indicative that something went really horribly wrong.
Representatives for IMMP, the industrial complex where the deadly explosion happened, said they are working on making improvements. In a statement on behalf of itself and its owner at Sinshan, Immip said quote safety is always our priority and that it quickly required all all enterprises to carry out safety risk screening and rectification after the accident. On top of the
fatalities and the injuries to workers. Matt notes that nickel processing can also wreak havoc on the environment and create health hazards for local communities.
So when you do go to these places, one of the first things you notice is air pollution of a kind I have not seen anywhere other than Beijing before things were cleaned up a bit there. I mean, it's a kind of pea soup haze that weirdly changes color through the day. There is also dust everywhere, which is from coal and from mind sights. I actually spoke to the medical clinic in the town next to Immip, and they talked about the alarming number of respiratory illnesses they see.
Nickel industry managers say they're mitigating and compensating for their environmental impact. EMP, where the Christmas Eve explosion happened, said it monitors air pollution to ensure compliance with Indonesian rules. Immap's managing director told Matt and Annie that ultimately it's a simple.
Question, as he put it, do you want to pay twice as much for a car? This all has a cost, and that cost gets fed through if you want to zoom out and make a bigger argument, is it better that the world gets onto EV's or not? And the world is only going to get onto EV's if they are affordable, So we need to make sure the nickel is as cheap as possible. You know, I think that's a totally legitimate argument. I'm not sure what the right answer.
Is after the break, what do the big automakers have to say about the conditions in the nickel industry and is there a better way to get the nickel that EV's need. Bloomberg's Matt Campbell says that in most cases, auto manufacturers don't source battery materials directly. It's difficult, if not impossible, to trace the metal in any given car
to any specific nickel facility. Our reporting indicates that car companies like Tesla, BMW, Ford, General Motors, Hyundai, Stilantis, and Toyota are probably relying on Indonesia nickel, or if they aren't yet, they will soon. Matt and his colleagues asked about ten major car companies to comment for this story.
Tesla and Hundai didn't respond. Of the ones who did, most said they don't have direct relationships with IMEP, the major nickel supplier, but they do require or expect their suppliers to uphold standards around human rights and environmental concerns.
When we are talking about supply chain relationships that go through five or six steps between the nickel mine and the battery, or six or seven steps between the nickel mine and the car, obviously, an ESG policy that gets formulated in the US or in Germany or Japan is probably not going to filter down that far.
There are other places ev battery makers could source nickel. Australia and Canada have huge deposits, But in Indonesia labor is cheap and so is coal, so much so Matt says, it just doesn't make economic sense to look elsewhere.
So actually, in Australia we've seen nickel minds literally shutting down, you know, in a country where a mine worker is easily making one hundred thousand dollars a year, they just are never going to be able to compete on costs with Indonesia. And in Tesla's sustainability Report, which they just published a new edition of a few weeks ago, there is a line in there that says, quite simply, the ev transition will not be possible by relying only on
non Indonesian people in the electric vehicle industry. People who want to see the electric vehicle industry succeed have concluded that there's just no alternative.
But there are other alternatives that don't use nickel at all. China's BYD uses lithium iron phosphate batteries in its cars. They don't get as much out of a charge, though, and Western carmakers have preferred nickel, especially in higher end vehicles. Overall, the nickel industry in Indonesia has helped deliver rapid growth to the country's economy and jobs to people in places that really need them. But those markers of progress do
come at a cost. So I asked Matt about this very fraught tradeoff.
I don't think it's futile to hope that car companies will demand higher standards and that those higher standards get enforced down the chain. There may indeed be a cost impacts act, and I think that's worth considering. And it's also worth considering whether things like government subsidies, tax credits, rebates, whatever, which are not unfamiliar with EVS can be deployed to make up for some of those cost impacts if needed. But also you need the Indonesian government to take more
action here. They are the ones who have the power to regulate, who have the power to improve infrastructure. But where I get very anxious is the idea would be so much better if none of this had happened. Because these people need jobs, they need to eat, they need to send their kids to school. We just collectively have to find a way to allow them to do those things in better conditions and in jobs that don't risk getting them killed.
Indonesia's Ministry of Energy and Mineral Resources said it diligently supervises safety at Nickelson's and is working to address health concerns. As for Jonathan's family, we asked his sister what she thought about Gunbuster's response. After he died in the fire at the plant.
The company covered the medical costs and the autofc and repatriated the body and gave us eight hundred and twenty four US dollars. Who was I'm satisfied because they were willing to take the responsibility and did not wash the hands of the incident.
This is The Big Take Asia from Bloomberg News. I'm Janet Paskin. This episode was produced by Young Young, Naomi Ung, Jaska Beck, and Alex Sugiura. It was mixed and fact jacked by Alex. It was edited by Caitlin Kenney, Aaron Edwards, and Brett Reagan. Additional reporting was done by Annie Lee. Special thanks to Eddie Dwan, Carmeli, Argana, Stella Coe, Angeline, Chuck yet Ying, and the Bloomberg Originals team. Our senior producers are Naomi Shaven and Kim Gittleson. Our senior editor
is Elizabeth Ponza. Nicole Beemsterbower is our executive producer, and Sage Baumann is Bloomberg's head of Podcasts. Please follow and review The Big Take Asia wherever you listen to podcasts. It helps new listeners find the show. See you next time.