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BASF and Eramet withdraw from Indonesian nickel project due to indigenous concerns

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On June 24, BASF and Eramet announced their decision to cancel a major green energy project in Indonesia, citing concerns over its impact on one of the world’s last Indigenous tribes living in voluntary isolation.

The proposed Sonic Bay project, located on the island of Halmahera in Indonesia’s North Maluku province, aimed to build a refinery producing 67,000 metric tons of nickel and 7,500 metric tons of cobalt annually. These metals are crucial for electric vehicle batteries and were slated to be sourced from the nearby Weda Bay Nickel mine, the largest nickel mine globally in which Eramet holds a minority stake.

BASF stated it would halt all ongoing evaluations and negotiations for the Weda Bay project, marking a significant retreat from their initial investment plans.

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Activists, including the UK-based Indigenous rights organization Survival International, had long campaigned against the Sonic Bay refinery. They raised alarms that the project, an extension of the Weda Bay Nickel operation, threatened the ancestral lands of the Forest Tobelo people. This Indigenous group, numbering between 300 and 500, maintains a hunter-gatherer lifestyle deeply connected to their forest environment, which they call O’Hongana Manyawa—the people of the forest.

Due to their isolation from the modern world, the Forest Tobelo people could not feasibly be consulted on projects affecting their lands, nor could they provide free, prior, and informed consent (FPIC) as stipulated by international standards.

Survival International reported instances where tribe members emerged from isolation to find their forests lost to mining activities, underscoring the severe impact such projects could have on their way of life.

Pius Ginting, coordinator of the Indonesian NGO Action for Ecology and Emancipation of the People (AEER), highlighted BASF’s withdrawal, suggesting that while market conditions played a role, environmental risks associated with Weda Bay Nickel’s poor environmental performance also factored into the decision.

The Weda Bay Nickel mine received a red grade in Indonesia’s annual environmental assessment (PROPER) for 2022, indicating significant non-compliance with environmental and social regulations.

Despite BASF and Eramet’s exit, operations at Weda Bay Nickel are expected to continue as Indonesia aims to bolster its position as a global battery metals hub. This trajectory poses ongoing risks to the Forest Tobelo people and their ancestral forests, according to Survival International.

In response to concerns, there have been calls for establishing a no-go zone around Indigenous territories to prevent further encroachment by mining and other activities. This proposal aligns with efforts from stakeholders like Tesla, which, though not sourcing from Weda Bay currently, has expressed interest in protecting uncontacted Indigenous groups in its operations.

Senior Indonesian politician Tamsil Linrung also voiced support for safeguarding the Forest Tobelo people through potential future policy measures, acknowledging the need to balance economic development with Indigenous rights and environmental stewardship.

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