Indonesia’s nickel mining industry has boomed, making it the world’s largest producer of the metal. With more than 14 active mines, Indonesia supplies more than 40% of global nickel demand, driven by its crucial role in electric vehicle batteries.
“Nickel is essential to the development of the electric vehicle sector, which will benefit the environment and the path to a greener global economy and meet climate change goals,” said Jason Sabor, senior analyst at S&P Global Commodity Insights.
The rapid growth in nickel production is closely linked to Indonesia’s partnership with China, the world’s largest producer of electric vehicle batteries. Chinese investment has boosted Indonesia’s mining capabilities, with a focus on domestic nickel refining after a ban on raw nickel exports in 2022. Despite the economic benefits, concerns are growing about the environmental impact, including water pollution and deforestation near mining sites.
Increased nickel production in Indonesia has led to oversupply and lower prices, impacting producers in Australia and Canada. In the US, companies like Talon Metals are championing secure supply chains by developing local nickel sources under strict environmental standards, and partnering with automakers like Teslaand promote battery recycling to meet the growing global demand for electric vehicles and renewable energy.
“It makes perfect sense that we want these companies to get these resources where they can get them, because we have them domestically and with our free trade allies,” said Todd Malan, chief external affairs officer at Talon Metals. “They are produced to a high standard. It’s a little more expensive to get these resources, but not so much more expensive that it affects the price of the vehicle.”
In 2020, Tesla Inc CEO Elon Musk called on mining companies to increase nickel production during a post-earnings call.
“I want mining companies to extract more nickel,” Elon Musk said. “Tesla will give you a huge contract for a long time if you extract nickel efficiently and in an environmentally sensitive way. I hope this message gets to all mining companies: Please get your nickel.”
Meanwhile, the United States faces significant challenges in its nickel supply, relying on just one mine in Michigan. The U.S. mined 17,000 metric tons of nickel in 2023, while Indonesia produced 1.8 million metric tons. Talon Metals is opening a new nickel mine in Minnesota, but the road to full production could take decades.
Watch the video to understand how companies are dealing with growing nickel production while addressing environmental concerns in the tech sector.
