- Germany’s BASF and France’s Eramet have pulled out of a $2.6 billion nickel-and-cobalt refinery in Halmahera, Indonesia, amid criticism that the mine supplying it threatens the forest home of an isolated Indigenous tribe.
- The refinery is part of the wider Weda Bay Nickel project, the world’s biggest nickel mine, whose concession overlaps with forests that are home to the hunter-gatherer Forest Tobelo people.
- Neither company mentioned the threat to the tribe in announcing their withdrawal from the project, attributing the decision instead to changing supply dynamics.
- Activists have welcomed the withdrawal as a respite for the Forest Tobelo, but this could be temporary, as Indonesia’s investment minister says the government is still negotiating with BASF and Eramet to return to the project.
JAKARTA — German chemical giant BASF and French miner Eramet have pulled out of a multibillion-dollar “green energy” project in Indonesia because of its impact on one of the last Indigenous tribes on Earth living in voluntary isolation.
In an announcement on June 24, both companies said they had scrapped plans to invest up to $2.6 billion in the project on the island of Halmahera in Indonesia’s eastern province of North Maluku. The Sonic Bay project would have seen the construction of a refinery producing about 67,000 metric tons of nickel and 7,500 metric tons of cobalt a year. These metals, crucial ingredients in electric vehicle batteries, would have come from the nearby Weda Bay Nickel mine, the world’s largest nickel mine, in which Eramet holds a minority stake.
In its announcement, BASF said it would “stop all ongoing evaluation and negotiation activities for the project in Weda Bay.”
The decision came after a sustained campaign by activists voicing concerns that the Sonic Bay refinery, which is essentially an extension of the Weda Bay Nickel project, would increase the risk of Indigenous peoples in the area losing their lands. Weda Bay Nickel’s concession overlaps with rainforest that’s home to hundreds of members of the Forest Tobelo people, according to U.K.-based Indigenous rights NGO Survival International, which has lobbied both BASF and the German authorities to drop out of the project.
‘The people who live in the forest’
The Forest Tobelo tribe are among the last Indigenous groups still living in voluntary isolation from the rest of world. They are believed to number between 300 and 500 hunter-gatherer nomadic peoples whose way of life is so intricately tied to the environment that they call themselves O’Hongana Manyawa — the people who live in the forest.
Because the Forest Tobelo people avoid contact with outsiders, it’s unlikely they could ever be reasonably consulted about any projects in their area, or give their free, prior and informed consent (FPIC) for the use of their customary lands. Some tribe members have emerged from their isolation to report losing their forests to the mining concession.
As such, any investment in the Sonic Bay project would likely contribute to the ongoing destruction of the Forest Tobelo people’s forests, Survival International said.
This could be a reason why BASF and Eramet pulled out of the project, said Pius Ginting, coordinator of the Indonesian NGO Action for Ecology and Emancipation of the People (AEER). BASF’s stated reason is that the supply of battery-grade nickel in the market has eased, and that it therefore doesn’t need to invest so heavily to secure supplies.
What it doesn’t mention, however, is that its home government, Germany, is legally obligated to protect, respect and implement the rights of Indigenous and tribal peoples and improve their living and working conditions in the countries where they live. That’s because Germany in 2021 ratified the International Labour Organization’s Indigenous and Tribal Populations Convention.
That would therefore make any German company’s involvement in a project like Sonic Bay that threatens Indigenous peoples a violation of the convention, Pius said.
He also pointed out that WBN had scored poorly in a routine annual assessment of environmental parameters by Indonesia’s Ministry of Environment and Forestry. Known as the PROPER assessment, it assigns a color code to rate companies’ performance, ranging from gold to green to blue to red to black; a gold or green grade means a company exceeds legal requirements.
In 2022, Weda Bay Nickel received a red grade, meaning it failed to operate in accordance with existing environmental and social regulations.
“Even if [BASF and Eramet] said the main reason [for their withdrawal] is because of the market and the economy, we see that environmental risks are of course being considered as well due to WBN’s bad PROPER score,” Pius said.
He added their abandonment of the project should be a wake-up call for the rest of the battery metals industry and the Indonesian government to improve the environmental, social and governance (ESG) performance of the industry.
‘No-go zone’ to protect Indigenous tribe
Despite this development, WBN’s mining operation looks set to continue as the government pushes for Indonesia to become a powerhouse in the production of battery metals. This means the Forest Tobelo people will continue to be at risk of losing their forests, Survival International said.
The campaign group recently posted a video showing an uncontacted Forest Tobelo family approaching workers at a mining camp. According to Survival International, the family was asking for food after their rainforest was destroyed. It said similar scenes can be prevented by establishing a no-go zone, where no mining or other activities can take place.
Much of the nickel mined at Weda Bay goes to Chinese EV makers; the mine’s majority stakeholder is Tsingshan Holding Group, the world’s biggest nickel producer. Tesla, which doesn’t currently source nickel from Weda Bay but has signed agreements worth billions of dollars with Indonesian nickel and cobalt suppliers, said in its 2023 impact report that it was “exploring the need for a no-go zone” to protect uncontacted Indigenous peoples.
In a meeting with Survival International representatives, senior Indonesian politician Tamsil Linrung also voiced his support for the protection of the Forest Tobelo people through the establishment of a no-go zone.
“We will try to make that region a no-go zone. If not in the near future, perhaps after the next president is sworn into office [in October 2024],” he said.
Respite — for now
For now, the news that BASF and Eramet are dropping out of the refinery project provides some respite for the Forest Tobelo people, said Survival International director Caroline Pearce.
“BASF’s withdrawal means that they, at least, will not be complicit in the Hongana Manyawa’s destruction. But Eramet, and other companies, are still ripping up the rainforest and the uncontacted Hongana Manyawa simply won’t survive without it. They must stop now, for good, before it’s too late,” she said.
But another top official, Investment Minister Bahlil Lahadalia — who faces allegations of self-dealing and corruption in the revocation and reissuance of mining permits — said negotiations are still underway to get BASF and Eramet to invest in the refinery. He attributed their withdrawal to a decline in EV sales in Europe as a result of weakening purchasing power, but said this would only be temporary.
“[The project] is still pending,” he said as quoted by Indonesian news website Tempo.co. “We’re still negotiating.”
Banner image: Weda Bay Nickel’s mining concession which overlaps with the forests of the Indigenous Forest Tobelo people. The mining activities were halted in September 2022 due to protests from the tribe. Image by Christ Belseran/Mongabay Indonesia.
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