(upbeat music)
- [Narrator] This boat isn't going
to an exotic holiday destination.
It's taking us to Obi Islands to get a rare look
inside one of Indonesia's largest nickel plants.
This factory is key in the global nickel supply chain.
Indonesia is by far the world's
largest producer of the metal,
an essential component for batteries
that power electric vehicles around the world.
But getting the nickel out of the ground is dirty work
and environmentally conscious consumers
may not be fully aware of how polluting it is
to obtain the metal.
- The pickle for the EV makers
is how do we get this nickel that we need
without hurting our reputation
and also without hurting the environment?
- [Narrator] We take an inside look
at nickel's growing importance
and the environmental toll it leaves behind.
Nickel is used in batteries
because it increases in EV's range.
Batteries with lots of nickel can run farther
than batteries that don't use the material.
- Nickel is the cheapest and the highest energy density
and that's why increasing nickel
is a goal of ours and really everybody's in the energy,
in the battery industry.
- [Narrator] For years, nickel had been sourced
from countries such as Canada and Russia,
where the metal is buried deep underground,
which makes it expensive to extract.
That's why car makers are turning to Indonesia
where nickel is found close to the surface.
- And what that means is that
it's actually relatively cheap to get to.
You don't have to do some big
sophisticated tunnel system underneath the ground.
The problem is that a lot of the nickel
overlaps with forests,
so when you're clearing the land
what you're doing is you're clearing rain forest.
- [Narrator] Increasingly, plants are using
a process called, high pressure acid leaching
to extract a nickel from the ore found here.
- [Jon] What that involves is subjecting the nickel
to extremely high temperatures and high pressures
and it ultimately turns it into a substance
that can be used in batteries.
- [Narrator] This method is about twice as carbon intensive
as other processes used in Russia or Canada
leaving behind large amounts of waste.
- It's another challenge for car makers
when they're contemplating sorting nickel from Indonesia
is that these islands in Eastern Indonesia
are very pristine, they're surrounded by coral reefs.
If there's leakage from the nickel into the reefs
that can be quite bad.
- [Narrator] Nickel mining often takes place in remote parts
of the country that are difficult to access.
This plant on Obi Island is a full day's journey
from the capital Jakarta and can only be reached by boat.
- There are concerns that there isn't that much oversight
over this process and that the local government departments,
although they may intend to enforce
Indonesian environmental law quite tightly,
they may really struggle to do that.
- [Narrator] A lot of the forest being cleared
is being done legally according to Indonesian law.
- So it becomes a bit tricky for companies
because it's ultimately Indonesia,
and Indonesia is saying this is okay,
but if it's okay for Indonesia government
should that necessarily mean it's okay for Tesla?
These are questions that I think Tesla is asking.
- [Narrator] Tesla and other automakers have in recent years
dispatched teams to Indonesia to understand
the full scope of the environmental concerns.
Despite its toll on the environment,
nickel mining has seen explosive growth in the country.
- Indonesia's government sees nickel
as a way for it to move up the value chains.
- [Narrator] In 2017, Indonesia was a minor player
in the EV battery nickel supply chain
but today about half of the world's nickel is mined here.
- They've restricted the export of nickel
so it has to be processed in country,
so once the nickel's processed
they're hoping that batteries will be built in Indonesia,
maybe exported from Indonesia,
the cars will be built in Indonesia.
That's the Indonesian government's game plan.
- [Narrator] Some analysts forecast that by 2027,
about 80% of the global nickel supply
used in EV batteries will come from Indonesia.
To mitigate the damage done by clearing forests
companies have pledged to replant trees over mined areas,
and the government has enforced laws
that punish illegal mining,
but environmentalists say corporate planting programs
won't restore the area's unique flora and fauna.
- It's very difficult and requires a lot of expertise
and a lot of money to really restore an environment,
especially in a delicate ecosystem like this.
So there are a lot of questions about
what these islands are gonna look like 10 years from now.