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Australian miner wants China to demand greener nickel from Indonesia
BMI Research, a think tank belonging to rating agency Fitch, expects the drop in nickel prices seen last year to continue this year.
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Smoke rises on Feb. 10, 2023, from a nickel smelter belonging to Chinese miner Virtue Dragon Nickel Industry (VDNI) in Morosi, Southeast Sulawesi. (AFP/Adek Berry)
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n Australian mining tycoon has said it wants China as the global leader in renewables and the energy transition to demand higher environmental standards for its supplies, including nickel from Indonesia.
“Every buyer of nickel needs to be really careful if they are buying from that source [Indonesia],” Andrew Forrest, the owner of Australian nickel producer Wyloo Metals, said during a visit to China in March, as quoted by the Financial Times (FT) on Sunday.
Forrest charged that nickel processing in Indonesia was “complete environmental irresponsibility”, as the minerals were supposedly being extracted at an immense cost to the environment.
In January, Wyloo Metals decided to shut down its nickel mines in Western Australia due to a significant drop in price for the mineral, mainly driven by a flood of cheap supply from Indonesia.
The firm followed the decision of Canada-based miner First Quantum Minerals, which also cut its production from its Australian nickel mine in the same month.
In response to accusations of environmental abuse by Indonesian nickel producers, global miners have urged the London Metal Exchange (LME) to provide a “green premium” for supply chains with better environmental protection. However, the LME stated that the market could not support a separate contract but instead introduced monthly reporting on nickel trading volumes below a particular threshold of carbon emissions.
If the LME would not differentiate between “dirty nickel and clean, just because it financially suits them, then in the end there’ll be a consumer backlash,” Forrest warned, as quoted by the FT.
