Indonesia gets ‘wake-up call’ to step up sustainability efforts in nickel industry after BASF pull-out
- The ‘wake-up call’ comes after foreign investors cancelled a US$2.6 billion nickel-cobalt refining project over falling prices and environmental concerns
In a rare admission, Indonesia’s government acknowledged on Friday the need to address sustainability in its nickel industry after German chemical giant BASF and French miner Eramet cancelled a US$2.6 billion nickel-cobalt refining complex project in the mineral-rich country.
The termination comes amid falling prices of nickel and a campaign by non-government organisations who say the project in North Maluku province risked destroying rainforest inhabited by indigenous people.
“BASF’s decision to withdraw its US$2.6 billion investment in the Sonic Bay project in Halmahera is quite unfortunate,” Nizhar Marizi, director of energy, mineral resources and mining at the Ministry of National Development Planning (Bappenas), told This Week In Asia.
“However, the cancellation serves as a wake-up call to address underlying issues in the investment climate, especially in the sustainability aspect of nickel commodities,” Nizhar said.
“It also prompts us to review the overall governance of our downstream industries, namely enhancing the regulatory framework, improving the ease of doing business and offering more attractive incentives to international companies.”
By addressing those challenges, Indonesia could attract a broader range of global investors, he said.
