WIRED - February 20, 2023

In Indonesia, sickness and pollution plague a sprawling factory complex that supplies the world with crucial battery materials.

AFTER DAYBREAK, THE village of Labota begins to shudder with the roar of motorbikes. Thousands of riders in canary yellow helmets and dust-stained workwear pack its ramshackle, pothole-ridden main road, in places six or seven lanes wide, as it runs along the coast of Indonesia's Banda Sea. The mass of traffic crawls toward the Indonesia Morowali Industrial Park, better known as IMIP, the world's epicenter for nickel production…A decade ago, Labota was a fishing village; today it's been subsumed into a sprawling city centered around IMIP, a $15 billion, 3,000-hectare industrial complex containing steelworks, coal power plants, and manganese processors, with its own airport and seaport. Built as a joint venture between Chinese and Indonesian industrial companies, it is at the heart of Indonesia's push to supply the electric vehicle market with nickel, a core component of batteries…That's especially true for Tesla, which has signed multibillion-dollar deals with companies at the site and is reportedly in talks to set up its own manufacturing facility in the Southeast Asian country…Meeting this demand has come at a huge social and environmental cost. Workers claim that deaths and injuries are common at IMIP. Medical professionals and environmentalists say the polluted air and water are causing respiratory problems, sickness, and eye injuries and destroying forests and fisheries. The rush to expand production has pushed local communities and infrastructure to the brink of collapse…Indonesia is home to the largest nickel deposits in the world, much of it found on Sulawesi, an equatorial island east of Borneo. Historically, nickel ore was shipped unprocessed, but around a decade ago, in an attempt to attract investment in heavy industries, the Indonesian government banned its export. Shortly before the ban took effect, in a ceremony attended by Chinese president Xi Jinping and Indonesia's then president Susilo Bambang Yudhoyono, Chinese steel giant Tsingshan Holding Group, one of the world's largest producers of nickel, signed a deal with Indonesian miner Bintang Delapan Group to build IMIP. Yudhoyono's successor, Joko Widodo, has continued the industrialization drive, courting the EV industry in particular….In April 2022, a consortium led by LG Energy Solution, the world's second-largest EV battery manufacturer, signed a $9 billion contract with mining company PT Aneka Tamban and the Indonesia Battery Corporation. In August of the same year, Tesla agreed to a $5 billion deal with two Chinese companies working at IMIP, Zhejiang Huayou Cobalt and CNGR Advanced Material. Chinese companies have come to dominate the EV supply chain, buying up mines and processing facilities around the world…WIRED spoke to dozens of workers at IMIP, including five employed by Tesla's supplier, PT Huayue Nickel Cobalt (HNC). Many of the workers arrived less than six months ago, and they describe working for up to 15 hours a day, earning less than $25-less than Indonesia's median salary of around $30 a month. Some have not had a day off in three months…Several say they suffer from breathing difficulties…These are not isolated cases. According to the Bahodopi Community Health Center, a regional clinic covering IMIP, 52 percent of patients last year came in suffering from acute respiratory infections. A number of nickel welders who spoke to WIRED reported eye pain, likely caused by particulates in the air, suggesting their safety gear was inadequate…Labor rights activists say that in its desire to bring investment into its nickel sector, the Indonesian government has weakened protections for workers. Last year, President Joko Widodo's government pushed through a controversial "Omnibus Law on Job Creation," after more than two years of constitutional and legal challenges, which relaxed environmental protections and workers' rights. The government billed it as a way to attract foreign investment. Activists say that's why the authorities are particularly keen to avoid a confrontation with Chinese companies, because of the billions of dollars they are pouring into Indonesia…The labor issues at IMIP sit alongside severe concerns in Indonesia about the environmental impact of the nickel industry. According to a Brookings Institute report in September, Indonesia's nickel sector is "particularly carbon-intensive and environmentally damaging," due to its reliance on coal…However, despite the evidence that the rush for nickel, driven by the demand for EVs, has already pushed beyond the boundaries of social and environmental sustainability, the industry is still expanding in Indonesia…To take advantage of the coming squeeze, IMIP's owners are doubling the size of the site and are in the middle of building a second park, Weda Bay Industrial Park (IWIP), on the neighboring Maluku Islands, which will eventually span 5,000 hectares.