Column: Electric dreams turn into a nightmare for battery metals
A sector that was once racing to build new supply has been closing mines and deferring projects as low prices bite into the cost curve.
Australian mining magnate Andrew Forrest has called on China to demand higher environmental standards from its global supply chain, particularly its companies conducting nickel processing in Indonesia, the Financial Times said on Sunday.
Forrest, the chairman of Fortescue Metals Group, said in an interview to the FT that electric vehicle manufacturers should be wary of Indonesian nickel, adding that it was being extracted at immense cost to the environment.
“China will need to enforce its own environmental standards on its global supply chains,” Forrest is quoted as saying by the newspaper during a visit to Boao, China. He further added that every buyer of nickel “needs to be really careful if they’re buying from that (Indonesian) source.”
Nickel is a key ingredient that is used in electric vehicle batteries.
Indonesia in February had launched a revised “taxonomy”, or green investment rulebook, categorising coal-fired power plants used in nickel facilities as part of the global transition to a green economy.
Environmentalists criticised the notion of categorising the financing of new coal power plants as sustainable, pointing out that such plants are a significant source of carbon emissions.
Indonesia has rapidly emerged as the new powerhouse of global nickel production but until now has not produced the metal in the high-purity form traded on either the LME or the Shanghai Futures Exchange.
China has become Indonesia’s top trading partner during the last decade, as its natural resources such as coal and nickel help to power the world’s second-largest economy.
(By Rishabh Jaiswal; Editing by Jacqueline Wong)
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