Business Brief: The true price of Indonesia’s nickel boom

Nickel is powering a revolution in the automotive industry and taking entire economies along for the ride.

In Indonesia, global demand is driving business growth, wealth and wider economic prosperity. But as Asia correspondent James Griffiths finds, extracting the metal comes at a steep cost: to the environment, to the workers facing dangerous conditions, and to communities being uprooted or left behind. More on Griffiths’ investigation below, but first:

In the news

That was fast: Lightspeed Commerce Inc. already has a lineup of potential suitors a day after it was revealed the point-of-sale software provider was on the block.

Not fast enough: The push to add more women to boards of directors is slowing at Canadian companies as diversity initiatives lose momentum.

Ahead of its time? Mark Zuckerberg sees the prototype of Meta’s augmented-reality glasses “as a time machine.” I can understand why tech journalists seem impressed. But the tradeoff for people not noticing you’re reading your texts is that they won’t be able to ignore you look like Elvis Costello.

Happening today

• Statistics Canada reports monthly gross domestic product, which could tilt the Bank of Canada toward a more aggressive track at its next meeting on Oct. 23.
• A key report on consumer habits in the United States today could point the Fed toward further interest rate cuts at its next meeting on Nov. 7 – two days after the presidential election. Who’s going to be No. 47? Send me your predictions: cws@globeandmail.com

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In focus

Behind our investigation into Indonesia’s nickel industry

James Griffiths and two independent journalists drove more than 1,200 kilometres across the Indonesian island of Sulawesi, visiting nickel mines, smelters and affected communities. Here, Griffiths reports on the journey behind the story.

🇮🇩 In early July, photographer Joshua Irwandil and journalist Dera Menra Sijabat joined me on a flight to Kendari, a city of some 350,000 people on the southeastern coast of Sulawesi. Over the next week, accompanied by a local guide, we drove more than 1,200 kilometres across Indonesia’s fourth-largest island, visiting nickel mining sites, smelters and affected communities for an investigation published this morning in The Globe and Mail.

Along with Australia, Indonesia has the world’s largest reserves of nickel, a vital mineral for producing the batteries that are powering the electric vehicle revolution around the world. Indonesian officials have spoken of making their country the Saudi Arabia of this resource, and of bringing comparable benefits to the Indonesian people as oil has done for ordinary Saudis.

Driving along roads that were often unpaved and covered in potholes – with the occasional detour because a landslide had blocked our path – all the while looking out at hillsides bereft of vegetation or shanty towns covered in litter, it was hard to see the wealth the nickel boom is allegedly bringing to Sulawesi.

At one mine, near the town of Bungku, we stopped at a “View Point” bedecked in flags of the Indonesian mining outfit PT. Teknik Alum Service, but the only things to see there were dying trees and flat expanses of red mud where the land had been scooped away. Nearby, the road hooked around the coast, and we could see the same mud seeping into the ocean, turning the previously clear blue water a dirty brown.

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In the nickel hub of Morowali, in central Sulawesi, we interviewed workers who complained of lax safety standards and poor pay, and locals who said nickel companies had illegally seized their land and polluted the water supply. We were lucky that it rained much of the time we were there: On dry days, locals said pollution from the coal that powers nickel smelters nearby can make the air almost unbreathable; many said they suffer from respiratory problems.

After a 10-hour drive west through the mountains, we reached the shores of Indonesia’s deepest lake: Matano. Early the next morning, our car was guided onto a tiny ferry barely bigger than the ferry itself, and we set out across the lake, to reach to the town of Sorowako, home to one of the world’s biggest nickel mines, opened in the 1970s by Sudbury-based Inco Ltd. The site is now operated as a joint venture between Inco’s successor company, Vale Base Metals, and the Indonesian government, which last year became majority shareholder.

PT Vale, as the joint venture is known, is on the hunt for new sources of nickel in the nearby town of Loeha Raya, where farmers have built a booming pepper industry that supports thousands of locals and tens of thousands of seasonal workers. It was here, walking through the fields of pepper plants, that we first truly perceived economic prosperity: new homes, cars and stories of children away at university in the big cities.

Read our story to learn why this newfound prosperity is threatened, and how Sulawesi’s nickel dream turned into a nightmare – one with direct links to consumers in the West.

VIEWS

One prescient take on the long-term demand for EVs might give Indonesian nickel miners comfort:

• But not so much for legacy automakers in the West, who refuse to reinvent themselves and risk missing the inevitable surge.

Two writers might at least find common ground in the idea that Canada is three companies in a trench coat:

• “Why big is sometimes better: Canada’s concentrated grocery sector has its merits, too.”
• “Canadians are being gouged by their banks at every turn. This has to stop.”

And some of us are having tunnel vision:

• The editorial board argues Doug Ford is “driving Ontario down the wrong road” with his plan for a tunnel under the 401 highway. (Wherever we’re going, are we there yet?)
• Unlike Ford, Tony Keller notes he isn’t gearing up for an election: “So I’m at liberty to say things that might tick off a lot of voters. Here goes.”

Arted

‘I got so desperate at one point’

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Francis Ford Coppola on his life in and out of Hollywood: What good is money if you’re not going to spend it on something you love? In conversation with The Globe’s Barry Hertz, the legendary filmmaker talks about the driving philosophy behind self-financing his passion project Megalopolis. (It helps to have a famed winery from which to take out a line of credit.) Career-capping triumph or financial folly? When you’re rich and want to do something, does it matter? You can read the full interview here.

Morning markets

Global markets were higher ahead of crucial U.S. PCE data, the Federal Reserve’s preferred inflation indicator, while Asian stocks got a mighty boost from China’s latest stimulus moves. Wall Street futures and TSX futures pointed lower amid investor caution.

Overseas, the pan-European STOXX 600 was up 0.28 per cent in morning trading. Britain’s FTSE 100 gained 0.46 per cent, Germany’s DAX rose 0.81 per cent and France’s CAC 40 advanced 0.24 per cent.

In Asia, Japan’s Nikkei closed 2.32 per cent higher, while Hong Kong’s Hang Seng surged 3.55 per cent.

The Canadian dollar traded at 74.19 U.S. cents.