Indonesia’s nickel sector has experienced a remarkable expansion, propelling it to become the primary producer of the metal worldwide. Boasting more than 14 operational mines, Indonesia now caters to over 40% of the global nickel demand, primarily fueled by its indispensable role in electric vehicle (EV) batteries.

“Nickel plays a crucial part in advancing the electric vehicle industry, which is pivotal for environmental benefits and the transition towards a greener global economy in alignment with climate change objectives,” shared Jason Sappor, a Senior Analyst at S&P Global Commodity Insights.

The substantial surge in nickel output is intricately tied to Indonesia’s association with China, the predominant global manufacturer of EV batteries. Chinese investments have significantly enhanced Indonesia’s mining capacities, with a particular emphasis on local nickel refining post the 2022 prohibition on raw nickel exports. Despite the economic advantages, apprehensions regarding environmental repercussions such as water contamination and deforestation in close proximity to mining areas are escalating.

The escalated nickel production in Indonesia has led to oversupply and reduced prices, impacting producers in countries like Australia and Canada. In the United States, entities like Talon Metals are advocating for secure supply chains through the development of local nickel sources adhering to strict environmental norms. They have forged partnerships with automakers such as Tesla and are championing battery recycling to meet the burgeoning global demand for EVs and renewable energy.

“It is entirely logical that given our domestic resources and alliances with free trade partners, we encourage companies to procure from accessible sources,” noted Todd Malan, the chief external affairs officer at Talon Metals. “The sourcing complies with stringent standards and while slightly pricier, the difference is not substantial enough to impact vehicle pricing significantly.”

In 2020, Elon Musk, the CEO of Tesla Inc, issued a rallying cry to miners to boost nickel production during an earnings call.

“We urge mining companies to ramp up nickel extraction,” emphasized Elon Musk. “Tesla is willing to offer substantial, long-term contracts to efficient and environmentally conscious nickel miners. I hope this call reaches all mining firms; we require nickel.”

Conversely, the United States confronts substantial hurdles regarding its nickel supply, largely dependent on a solitary operational mine in Michigan. In 2023, the US extracted 17,000 metric tons of nickel, a stark contrast to Indonesia’s production of 1.8 million metric tons. Talon Metals is actively working towards opening a new nickel mine in Minnesota; however, achieving full-scale production could span over several decades.

View the video to gain insight into how enterprises are managing the upsurge in nickel production while addressing environmental issues within the technological realm.