Australian mining magnate Andrew Forrest has urged China to demand higher environmental standards from its global supply chain, particularly focusing on companies engaged in nickel processing in Indonesia, which he accuses of "complete environmental irresponsibility."
In a recent interview with the Financial Times, Forrest — the chair and largest shareholder of Fortescue Metals Group — said electric vehicle manufacturers should be wary of Indonesian nickel, which he said was being extracted at immense cost to the environment.
“China will need to enforce its own environmental standards on its global supply chains,” Forrest said during a visit to Bo’ao, southern China. Every buyer of nickel “needs to be really careful if they’re buying from that [Indonesian] source”, he said.
Forrest, an iron ore billionaire who has long-held ambitions in nickel, shut down mines in Western Australia in January due to a sharp drop in the nickel price, partly driven by supply from Indonesia. He had acquired the assets via his Wyloo company last year.
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Indonesia has rapidly become the world’s largest producer of nickel, used in electric car batteries and steelmaking, as it leverages its vast reserves to capture more of the supply chain. Chinese companies have poured in billions of dollars and control the country’s biggest nickel operations.
But Indonesia has faced growing criticism from environmental groups over forestry loss, mining waste pollution and high carbon emissions because of its reliance on coal-fired power. In response, Jakarta has vowed to step up monitoring of environmental standards.
The accusations of environmental abuse against Indonesian nickel producers have led global miners, including BHP and Fortescue, to press the London Metal Exchange — where nickel contracts are traded — to provide a “green premium” for sustainable production.
If the LME did not differentiate between “dirty nickel and clean, just because it financially suits them, then in the end there’ll be a consumer backlash”, Forrest said.
The LME has said that while the market cannot yet sustain a separate futures contract, it supported trading in low-carbon nickel on its Metalshub platform. It has also introduced monthly reporting on nickel trading volumes below a particular threshold of carbon emissions.
Editing by Reiner Simanjuntak
