Abroad Abo

ge Abroad Indonesia Indonesia is the largest nickel producer in the world - now China and the West are vyin

Nickel mine on the island of Sulawesi: “The gate to hell has opened” Photo: Ulet
Ifansasti / The New York Times / Redux / laif

Huge natural resources

How Indonesia wants to get rich –

thanks to the transport transition
No country produces more nickel than Indonesia. A key
component in many car batteries and therefore indispensable
for the transport transition in the West. The problem: China is
already there.

Laura Höflinger reports from Morowali

February 9, 2024, 1:00 p.m • from DER SPIEGEL 7/2024

Listening article • 12 min

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The fire never goes out. Flames burn 24 hours a day, seven
days a week in Indonesia's Morowali Industrial Park. Trisno
Wasito stands on an iron catwalk with a helmet, face mask and
heavy boots on her feet and looks into the depths. The
steelworks machines thunder beneath him. At 2,000 degrees,
metal melts into the consistency of lava in huge blast furnaces.
Blue-white flames blaze up, reddish shadows flicker on the
ceiling.
At one point, bright light floods the room. Wasito raises his
arm in front of his face, sweat on his forehead. One of the
machines has opened and a glowing orange bar of steel slides
onto the conveyor belt. It hisses as water splashes onto the
embers. The engineer shouts against the noise: “The gates to
hell have opened!” he shouts.
The engineer Trisno Wasito in the steelworks Photo: Laura Höflinger / DER
SPIEGEL

Hell used to be paradise. The Morowali district, where the

industrial park is located, is located on Sulawesi, an island in
Indonesia. Anyone who approaches the region from the air
will see green mountains and turquoise-blue lagoons. A few of
the last untouched corners of the rainforest. But again and
again there are cleared forests, excavators digging into the red-
brown earth. From above it looks as if a wild animal has made
a wound in the jungle.
Rohstoff-Riese
Länder mit der größten Nickelproduktion, 2022 in Tausend Tonnen

Indonesien 1600
Philippinen 330
Russland 220
Neukaledonien (Frankreich) 190
Australien 160
sonstige 781
S Quelle: US-Innenministerium

The world's largest nickel deposit is located on the edge of

Indonesia. There are said to be around 21 million tonnes in the
ground, around a fifth of the world's total. Factories need it to
produce stainless steel. But increasingly - and this is why so
many companies and governments in the West have recently
become interested in Indonesia - nickel is needed for the
production of lithium-ion batteries.
In a world that wants to move away from gasoline and diesel
and towards electric mobility, nickel is the new oil. And
Indonesia is a kind of Saudi Arabia.

Indonesia elects a new president

On February 14, the Southeast Asian country will elect a new

president, and the election may be the most boring thing
about this remarkable country. A nation like no other: The
national territory is spread over an estimated 17,000 islands,
depending on how they are counted and the water level. A
geographical monster that stretches across the Indian Ocean to
the Pacific and vast distances. It is around 5,000 kilometers
from one end to the other, more than the Berlin-Kabul route.
All of this in the middle of a region that serves as a stage for
the showdown between China and the USA , the Indo-Pacific.
With almost 280 million inhabitants, it is also the fourth most
populous country in the world.
And Indonesia has big plans. It wants to become an industrial
nation and even one of the largest economies in the world in
20 years. The nickel wealth on the island of Sulawesi plays an
important role in this.
It is a pillar of the economic policy of Joko Widodo, known as
Jokowi, Indonesia's hugely popular president. He came into
office in 2014 as an outsider in a state whose fortunes had
until then been largely controlled by a small elite. In 2020, the
government banned the export of raw nickel.

President Joko Widodo on a state visit to China Photo: Ken Ishii / EPA-EFE

Election campaign decorations in the capital Jakarta Photo: Bay Ismoyo / AFP
Anyone who wanted to access the country's natural resources
should come to Indonesia in the future. Should build factories
here and create jobs. The global energy transition, according
to Jokowi's plan, is intended to make Indonesia a rich country.
He himself cannot run again in the election, as the constitution
prohibits this. But whoever becomes Indonesia's next
president, the country's course is unlikely to change any time
soon.

Air pollution is enormous

Because Indonesia is doing well – also thanks to its raw

materials policy. The 32-year dictatorship only ended in 1998.
Peace and democracy have reigned for more than 25 years
now. New airports have emerged, roads and multi-million
dollar start-ups, possibly even a new capital soon. In the
previous city, Jakarta, home to almost eleven million people,
glittering skyscrapers rise into the sky in the center. But in
poorer neighborhoods and on many islands far from the
boom, there is still a shortage.
The engineer Wasito came to Sulawesi for the first time more
than ten years ago. Back then, “there was nothing in
Morowali,” he claims. A few thousand fishermen and rice
farmers perhaps, mangroves grew on the shore.
Now hundreds of trucks are struggling along the roads,
crumbling under the heavy load. The chimneys of the coal-
fired power plants are rising into the air. Barges are constantly
bringing more coal, more ore, more everything. Floodlights
illuminate the area at night. At shift changes, thousands of
workers on motorcycles stream onto the streets, so many of
them and so closely packed together that one resident says it
feels like "a river of yellow hard hats."
Workers changing shifts Photo: Laura Höflinger / DER SPIEGEL

Nickel mine on the island of Sulawesi Photo: Adek Berry / AFP

When the sun rises, it only appears as a pale light. There is no

risk of sunburn, and Morowali is located on the equator. A
cloudy veil of smog surrounds people and machines. A life like
behind frosted glass.
But also: twelve percent regional economic growth.
And didn't other industrialized nations become what they are
today in a similar way? At lunch, Wasito is amazed that the
mines in the Ruhr area are now just sights and the industrial
parks are jogging trails. The engineers at the table believe that
a wealthy country can afford this.
In her eyes, her country's leadership is doing exactly the right
thing.

Indonesia's politicians present the export ban as

retributive justice

Wasito can still remember the day the president came to visit.
On May 29, 2015, Jokowi inaugurated the first nickel smelter;
a partial export ban had already come into force at that time.
Today we have to say: the strategy worked. International
companies set up shop and hundreds of thousands of new jobs
were created. Within a few years, Indonesia became one of the
largest steel exporters in the world.
Recently the government banned the export of bauxite, tin
and copper could follow.
The EU is angry about Indonesia's raw materials nationalism.
Brussels has successfully lodged a complaint with the World
Trade Organization. Indonesia's leadership was unimpressed
and objected. The fact that Europeans insist on the customs of
international trade seems to be forgotten here.
Some politicians argue that the export ban is the right of a
country whose treasures once made the Dutch colonial rulers
rich. They present the nickel ban as a corrective to a historical
guilt, as an instrument to make up for the shame of the past.
Vice candidate Gibran, presidential candidate Prabowo in Jakarta Photo: Achmad
Ibrahim / AP

Many people think that way. Prabowo Subianto, for example,

the man who will probably succeed Jokowi as president. A 72-
year-old retired general and current defense minister who has
been accused of serious human rights violations. And who, in
a strange twist of this election campaign, is running with
Jokowi's eldest son as his running mate. Formally, Prabowo is
one of Jokowi's political opponents. But the two sound
similar: "We don't really need Europe anymore," Prabowo
said recently.
Because there is China.

Chinese companies dominate nickel production

After lunch, Wasito and his colleagues go to pray. Indonesia is

the largest Muslim-majority country in the world, with 87
percent of the population following Islam. After returning
from the company mosque, the engineers want to show off the
latest expansion of the industrial park. The bus turns into a
quiet, almost deserted part of the factory. Acid and steam flow
through pipes into large pressure vessels. Inside, a product is
being created that now sits on a table in a metal bowl in the
middle of the factory. The material looks like green moon rock
and crumbles in your fingers.
The green chunks are a preliminary product for batteries such
as those installed in electric cars. The name of the
manufacturer is written on a sign: Huayue Nickel Cobalt, a
joint venture of Chinese companies based here.
53 companies are based in the industrial park, almost all of
them come from China. Almost all of Indonesia's nickel
production is in Chinese hands.
Neither Indonesia's leadership nor its population are anti-
Western or particularly friendly to China. Indonesia
traditionally sees itself as non-aligned. A country that doesn't
take sides, but balances between the great powers. This was
Jakarta's attitude during the Cold War and remains so today.
But when asked what the biggest difference is between the
West and China, a minister in the capital says: "Europeans
come, ask questions, think, nothing happens. The Chinese will
send the CEO and then a decision will be made.”
The absence of overly critical demands for environmental
standards and climate protection is convenient – ​and lucrative
– for Indonesia. For Beijing, it means dominance over what
could be a key 21st century resource.
And what does that mean for car manufacturers? What would
happen if there were a dispute with China over Taiwan ?
Another conflict recently demonstrated this scenario: in 2022,
German industry would still receive almost half of its nickel
from Russia. Now many Westerners are courting Indonesia. In
the reception hall there are photos of Huayue Nickel Cobalt
with representatives from Tesla , Volkswagen and Ford.
When they arrive, they all discover that others were faster.

The fishermen complain that there are hardly any fish

swimming in the sea anymore

Those who hesitate certainly have good reasons. There is

Indonesia's dependence on coal-fired power. The problem of
corruption. The fact that the local fishermen say that since the
industrial park was built there have hardly been any fish
swimming in the sea. Like Jusman Ondo, sitting on the jetty in
front of his home, a hut on stilts in the water. “We used to light
a fire and when the embers were hot, we would cast out the
fishing rod,” he says. "Because we could be sure that
something would bite." That was the end of it. He lowers a
bucket on a rope. The water he draws up is unnaturally warm.
The factories on the other side of the bay discharge the hot
cooling water directly into the sea. "They're going to kill us
all," says Ondo.

Fisherman Jusman Ondo sits on the jetty in front of his home Photo: Laura
Höflinger / DER SPIEGEL

The green turn – on the island in Sulawesi it is pretty dirty. A

circumstance that Chinese companies seem to have far fewer
problems with.
In the lobby of the Chinese company Huayue there is a world
map in which not Europe but China and Indonesia form the
center of the world. On a poster next to it, the company
advertises that it sells its products to the world's largest battery
manufacturers, most of them also Chinese. A second poster
shows where these batteries are usually installed: in Apple
computers and cars from BMW, Mercedes, Audi and
Volkswagen.
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