The Center of Economic and Law Studies (CELIOS) emphasizes the need to focus on developing the nickel recycling industry to avoid negative economic and health impacts from nickel downstream activities.
“We expect the mid-term goal for mining to be transitioned to the recycling industry,” Bhima Yudhistira, Executive Director of CELIOS said on Tuesday, February 20, 2024.
Bhima stated that in the development of natural resources, the government should focus more on providing greater incentives not to processing and refining industries (smelters) but to battery recycling industries.
“So that we do not continue extraction, and this has become a trend in the US, Europe, and many countries. They provide incentives for recycling because there have been warnings that the nickel reserves used for electric vehicle raw materials may not be as abundant as we think,” he said.
Bhima mentioned that several mining associations have already warned that nickel reserves will be depleted within seven to 15 years.
“If there is no comprehensive governance change within the nickel processing industry, we will become importers of nickel ore if we do not prepare the right recycling industry,” he said.
“So, mine and carry out downstream activities, but there has never been an answer when the resources then diminish,” he added.
According to Bhima, the lack of control over this massive exploitation has even led to a smelter company importing nickel ore. “That should be a real warning,” said Bhima.
According to Bhima, since the issuance of nickel smelter permits, the government should have attached tax holiday incentives and others to the recycling industry.
“So let’s encourage the recycling industry to become the mainstream, not downstream activities,” he said.
Bhima even said that, in his opinion, the long-term impact of the mismanagement of nickel could make Indonesian nickel undervalued.
“The battery industry will continue to research alternatives to nickel,” said Bhima.
In addition to promoting the development of the recycling industry, Bhima also mentioned the need for the government to revise the construction of coal-fired power plants in industrial areas. Presidential Regulation No. 112/2022 is revised, canceling new smelter permits.
“If nickel stocks are increasingly limited, what needs to be done is to evaluate existing smelters. Have they implemented ESG (Environmental, Social, Governance)? Is their Environmental Impact Assessment (AMDAL) open to the public? Everything needs to be evaluated so that we don’t believe in the false hope that downstream activities contribute more than 7 percent to the economy if it’s business as usual,” said Bhima.
