For much of the last century, metals companies have made stainless steel from nickel mined in Russia or the Philippines and smelted at temperatures up to 2,900 degrees. But demand for nickel is outstripping supplies because the metal is a key component in most electric vehicle batteries. So metals producers have turned to a new supplier—Indonesia, which possesses vast reserves of a previously spurned low-grade type of nickel—and new smelting methods.
Indonesia’s emergence as the world’s largest source of nickel has boosted supplies and reduced prices. But it has also triggered complaints from environmentalists and Western mining companies that the refining methods used in Indonesia consume far too much energy and create too much waste. And some U.S. policymakers think that China—whose mining companies dominate the Indonesian industry—has too much influence in the country.
Western automobile and battery companies are caught in the middle: In a frantic hunt for battery metals, Ford, Volkswagen, Brazilian mining company Vale and South Korean battery maker LG Energy Solution have announced billions of dollars in nickel and battery deals in Indonesia over the last year or so. The deals secure enough nickel to make millions of EV batteries per year.