The promise of nickel: Power and prosperity in Indonesia

Part I

MEGHNA CHAKRABARTI: Episode four. The promise of nickel.

ERNEST SCHEYDER: Nickel is a grayish metal commonly used as an alloy to make stainless steel.

In an electric vehicle battery, it can increase energy density and storage capacity, thus allowing the vehicle to move farther on a single charge. Indonesia, Australia, and the Philippines are the world's largest nickel producers. Indonesia's nickel production has nearly tripled since 2020, and the country now accounts for more than 50% of global supply.

Controversially though, the nickel production methods in Indonesia have not been at the same standards expected of Western miners, fueling controversy across global nickel markets. The only U.S. nickel mine will be depleted by 2025.

CHAKRABARTI: That nickel primer provided, as he has all this week, by Ernest Scheyder, author of “The War Below: Lithium, Copper, and the Global Battle to Power Our Lives.”

As Ernest says, the nickel story is an Indonesian story. In 2022, global production of nickel hit approximately 3.3 million tons. And fully half of that came from Indonesia.

Nickel plays a critical role in the clean energy future. It’s so essential to the development of electric vehicle batteries, the element was a frequent point of discussion from Tesla executive Andrew Baglino at Tesla Battery Day 2020.

ANDREW BAGLINO: And that's what we have on the chart here. Dollar per kilowatt or a cathode of just the metal. And you can see nickel is the cheapest and the highest energy density. And that's why increasing nickel is a goal of ours and really everybody's in the energy and in the battery industry. 

CHAKRABARTI: Indonesia’s most important nickel reserves are on the islands of Halmahera and Sulawesi. And It’s on jungle-capped Sulawesi where we met Habib Nadjar Buduha.

Buduha is multi-talented. He’s made a living as a journalist, as a tour guide, and as a scriptwriter for Indonesian soap operas. But in 2009, Buduha found his true calling in marine protection. He’s founder of the Toli Toli Labengki Giant Clam Conservation project.

(TRANSLATION): The largest one ever found was 137 centimeters. Around here though, they’re only around 90 centimeters. 

CHAKRABARTI: That’s almost three feet across. The largest are known to grow to more than four feet. So, yes, Tridacna gigas are gigantic. They can weigh hundreds of pounds and live for more than 100 years.

Giant clams were once common in the turquoise shallows off the Sulawesi coast. But starting in 2014, Buduha discovered they were getting harder to find, because they were being buried alive. Thanks, in part, to nickel mining.

(TRANSLATION): Poor mining management causes soil and mining waste to enter the sea. It’s killing the clams. The sediment buries them. We found one area where the sediment exceeded one meter in the year 2021 alone.

CHAKRABARTI: Buduha’s 2014 discovery came precisely the same year that then-Indonesian president Susilo Bambang Yudhoyono approved a total ban on mineral ore exports out of the country. It shook up the global nickel industry, and since then, the hills and rainforests surrounding Sulawesi’s coastline have been razed for new nickel mines and processing facilities.

For Indonesia, the nickel export ban wasn’t simply a powerplay to control global mineral supplies. It was a central part of the government’s long-term plan to leverage nickel’s importance in the clean energy future to bring greater development and prosperity to Indonesia now.

NICKEL AD: Amidst the world slowdown, we stand firm as home to a fifth of global nickel reserves. Indonesia is poised to lead the global EV battery industry. 

CHAKRABARTI: In fact, nickel is so valuable to Indonesia the government touts it, in television ads like this one, that air around the world. Or, as current president Joko Widodo told the Economist when Indonesia hosted the G-20 back in 2022:

PRESIDENT JOKO WIDODO (TRANSLATION): Yes, we want to build a large ecosystem for EV batteries. And this will provide added benefit for Indonesia. That’s what we’re after.

NICKEL AD: Committed to environmental protection, enhancing investment climate through digital licensing. Indonesia, you are better tomorrow. 

CHAKRABARTI: In Sulawesi, Habib Nadjar Buduha says the nickel hasn’t bettered the tomorrow for many island residents or the environment. In the dry season, winds whipping through the strip mines kick up dust storms. In the rainy season, mud from the mines pours through local villages and into the ocean, burying the adult giant clams.

BUDUHA (TRANSLATION): The seawater used to be clear. Now it’s like a river, especially during the rainy season. You can’t see anything in the water. It’s murky. Very murky. The color is reddish brown.

CHAKRABARTI: The mines themselves aren’t the only problem. Sulawesi’s air and water are further polluted by a new, closely related industry. One that seemed to spring up almost overnight along the Sulawesi coast. In 2021, Chinese-owned companies began setting up sprawling smelting plants that turn raw nickel ore into EV grade battery metal.

BUDUHA (TRANSLATION): This is a very sad situation. Very, very, very sad.

CHAKRABARTI: And this past December, 21 people died when a fire broke out at one of those smelters, owned by a division of China’s Tsingshan Holding Group.

Buduha says coral reefs are also being buried in pollution. Some fish are disappearing from nearby waters. That forces local fishermen further out to sea to pursue their catch at greater expense and risk. So while Indonesia’s national economy may be growing, mining and smelting are creating existential challenges for communities that rely on healthy oceans and forests.

BUDUHA (TRANSLATION): The forest is already cleared. It will become barren land. Imagine how difficult it would be to survive in a place like that.

CHAKRABARTI: There are few signs that Indonesia will veer away from its plans for national prosperity via nickel mining. When President Widodo says he wants to create an entire eco system for EV batteries, he has in mind things like this:

ELON MUSK: Saying how do we get from the nickel ore in the ground to the finished nickel product for a battery. And so we've looked at the entire value chain and said, how can we make this as simple as possible?

CHAKRABARTI: Tesla Founder and CEO Elon Musk in 2020. In 2023, Tesla hinted that it was close to finalizing plans to build a battery plant in Indonesia. That summer, though, Musk snubbed the Indonesian government by announcing Tesla would focus its Southeast Asia efforts out of Malaysia instead. And there are signs that the global EV market is trying to move away from nickel-based batteries – which we’ll hear about later.

These are setbacks, but not permanent ones in the eyes of the Indonesian government.

They already claim major changes. For example, per capita income is up. It reached $4,580 in 2022. But to get into the top five economies, Indonesians’ incomes will have to quadruple. As such, President Joko Widodo promised major reforms of the nation’s educational and vocational systems.

Indonesia proclaimed independence from Dutch colonial rule on August 17, 1945. Today, the government is unwavering in its stated goal to transform the world’s fourth most populous nation into one of the world’s largest economies. And it wants to do it by Indonesia’s 100th birthday, which the government is calling “2045 Golden Indonesia."

President Widodo is term-limited and will leave office this October. He is resolute in his belief that nickel and other elements essential for clean energy will pave the way to a new Indonesia. His own path may be evidence of that. Widodo is the nations’ first president who does not come from Indonesia’s political or military elite. He used to run a furniture factory.

 (TRANSLATION) “There is a change in mindset. A change in the way of working,” Widodo says. “I believe with the power of natural resources and the strength of human resources, I believe it is true that this country will be able to leap forward.” 

CHAKRABARTI: When we come back --

We were colonized for 350 years. In the next 70 years, we are just still producing commodities, which was the reason why we were colonized. Something has to change.

CHAKRABARTI: Episode four of our series “Elements of energy” continues in a moment. This is On Point.

Part II

CHAKRABARTI: We're taking a look at the promise of nickel, power and prosperity in Indonesia. I'd like to bring Cullen Hendrix into the conversation.

He's senior fellow at the Peterson Institute for International Economics. Cullen, welcome to On Point.

CULLEN HENDRIX: Absolute pleasure to be here with you.

CHAKRABARTI: In the previous segment, I spoke generically about the importance of nickel to the EV battery market. Can you tell us in more detail why is nickel so important to the global economy overall today?

HENDRIX: Okay, in that excellent overview that you provided earlier, you touched on the role that nickel has played in the industrial economy. For the last century or well over the last century now, in stainless steel. The reason we're talking about it now is this important role that nickel plays in the green energy transitions.

It's used in a variety of green energy applications. It's used in solar and turbines and as a catalyst in green hydrogen production. But the real meat of the action, so to speak, here is in electric vehicle batteries. It is an important material, because it increases the energy density of the battery.

And it makes the batteries more durable. It extends their lives and extends their range. And if you talk to consumers, range is one of the biggest concerns that they have about electric vehicle adoption. So to the extent that you can solve that particular problem, you can bring more people into the market and help speed up the transition from hydrocarbon-based transport systems to electric transportation systems.

CHAKRABARTI: Got it. So when we say energy density, what you're saying is that these nickel-based batteries just really hold power for a lot longer, which gives those batteries greater range.

HENDRIX: Yes. And it allows them to be smaller than they would be otherwise, which is great since electric vehicles are pretty heavy.

CHAKRABARTI: Okay. And specifically, you're talking about NMCs, right? Nickel, manganese, and cobalt batteries. Cobalt, we talked about yesterday, regarding the Democratic Republic of the Congo.

HENDRIX: Yes.

CHAKRABARTI: Okay. We're going to come back to whether the technology in these EV batteries may be moving away from nickel. We'll do that a little bit later in the show. So obviously we talked about just how much nickel is in the ground in Indonesia, but there's a common analogy that's been applied to Indonesia. I'd love for you to explain why you think this analogy works, that Indonesia has been called the Saudi Arabia of nickel.

HENDRIX: To call Indonesia the Saudi Arabia of nickel is actually a little bit of an insult to Indonesia's current market share.

CHAKRABARTI: (LAUGHS)

HENDRIX: Saudi Arabia's role in global oil markets was never quite as pivotal as Indonesia's role has emerged in the last couple of years in the nickel market. So Indonesia is home to about half of global production and half of global reserves. And due to changes in the mining industry and technological changes in the processing industry, it's anticipated that, a few years from now, Indonesia could be supplying 60% to 70% of the world's nickel.

So our green energy future, our green transport future, is in very significant ways wrapped up in the economic prospects and the destiny of Indonesia as an emerging economy. Across this series, this has been one of the recurring themes, that so much of the world's clean energy future relies on I'd say the well-being and the global willingness of a small number of countries to really bear the burden to get us to a greener future.

So let's talk about the path that Indonesia has chosen to take, which seems to me to be both very bold and fairly unprecedented. So take us back to, I think it was 2014, when the country decided to institute that initial ... mineral ore ban, export ban out of Indonesia.

Talk to me about how that happened.

HENDRIX: So actually, I would say that the story starts just a little bit earlier than that, in 2009.

CHAKRABARTI: Okay.

HENDRIX: Which is a passage of a law that would require companies to process locally. And this was part of, at that time, an attempt to move up global value chains, to reposition Indonesia as not just a source of natural resources that can be exported, to then be put into productive use in other economies, to attempt to move up the value chain or down the stream as it were into processing. Now that doesn't really get teeth until 2014, with the passage of another law, which creates a much more stringent kind of regulatory environment. This makes it harder for companies to get around these export restrictions.

Without having to pay higher taxes. And it also, importantly for our story, requires those companies that want to export, to begin investing in smelting capacity. So smelting is the process that is going to take this nickel ore and turn it into something that is usable for industrial purposes.

CHAKRABARTI: So I've been, I have to be honest, following the timeline of the decisions made in Indonesia has been a little challenging for me. So I appreciate your clarifying this. Because after 2014, I understand that there were some rollbacks and then re-institutions of various forms of the national laws around nickel.

So where are we at now? How can we describe what the ban, the export ban looks like in Indonesia?

HENDRIX: Okay. So the ban as you mentioned, the ban was relaxed and around 2017 some of these restrictions were no longer being heavily enforced. It comes back with vigilance in 2020.

And the specific timing of this, I think is related to a couple of factors. First, it's related to the fact that the previous export ban had been pretty successful in driving up domestic production of ferronickel, which can then be used to help build out the country's steel industry. As an industrializing economy, steel is, of course, a critical component of building that industrial future.

And so there was a lot of interest in using this as a mechanism to provide support and provide feed in inputs into that steel sector. But in 2020, you have, of course, the pandemic, which causes, I think, a general reconsideration of our economies, our global economies and then the economies within it. A reconsideration of the supply chain vulnerabilities that exist.

And at the same time, you have a beginning, the beginnings of a sense that we are going to be entering a period of increased adoption of electric vehicles. And at that moment, Jokowi's administration reinstitutes this export ban. And this, I think, brings us more or less to the current moment. Because as that export ban is instituted, we also have developments in mineral technology that are allowing for the processing of Indonesian nickel to now achieve grades that it can move into new markets, specifically to the EV market.

CHAKRABARTI: Got it. Okay. So has a country done anything like this before, specifically about these essential elements or mineral or export bans? Has it happened from any other nation?

HENDRIX: There have been a variety that have, I'd say, taken up the cause, so to speak, in the aftermath, because of the perceived success of the Indonesian ban.

But this is not, I should clarify here. There's a long historical precedent of countries exerting kind of national sovereignty over their subsoil resources. There was a wave of nationalizations in the oil industry that goes back to the 1930s, on through the '60s and '70s. What I think here is, what I think is happening here is a little bit different though, because there is an attempt to use this export ban as a mechanism for really reshaping the composition of the Indonesian economy.

There's a strong desire not to remain locked into a dependency on international markets, just to provide them with raw materials. There's a desire, like I was saying before, to move up those value chains and start producing EV batteries, but then eventually, potentially, electric vehicles themselves.

And each of those steps, the closer you get to that final consumer, the more value is added, the more industrial jobs are created, and the more it buoys the economy.

CHAKRABARTI: Yeah. In a sense, it's exactly the same mindset or let's say thrust that President Biden is trying to get rolling here in the United States. When we talk about reshoring or friend shoring or shortening supply chains regarding domestic production of electric vehicles, etc.

So it's a very attractive and familiar use, or let's say planned use, of a nation's resources. However, Cullen, I'm so glad you mentioned that this isn't the first. Like nations in the past have made moves to either nationalize or get more control over the resources in and underneath their soil, oil being the big one. But I wanted to ask you, we know how that's gone.

For several nations in the past, right? The industrialized, high income, big economies of the world, particularly the United States, tend to not like that. And there's examples aplenty of then, the United States government interfering with those nations to stop the nationalization. Did Indonesia feel like it was taking that risk when it decided to make these major changes with its nickel reserves, or has global geopolitics just changed so much that didn't even rise as a potential concern?

HENDRIX: I think the global context in which this is occurring is fairly different from the period that prevailed, right, during the 1950s through the 1970s. Then we were talking about a Cold War context in which geopolitical tensions were structurally much higher than they have been in the recent past. So that a lot of the first steps of Indonesia's move in this direction, I think weren't viewed as being as threatening, because they weren't necessarily occurring in an international environment that was defined by this kind of overarching pattern of competition between the United States and the Soviet Union.

Now having said that, I think it's taken on a very different kind of flavor in the aftermath of the pandemic, as we've seen this broader move towards what is called decoupling by us economists in the global economy, which is just that the United States and China, for some similar, but also dissimilar reasons, are attempting to reduce their vulnerabilities to one another in terms of their trade vulnerabilities and dependence on one another for goods and services.

In order to increase the latitude that they have in the global geopolitical arena. And Indonesia is precisely the kind of country that is likely to be given increased scrutiny. Because just like oil was critical to the projection of military force and the functioning of an industrial economy in the 20th century, critical minerals and nickel specifically are viewed as playing that same role moving forward.

And these are naturally going to increase interest from a geopolitical perspective, not just from the United States, but on all sides.

CHAKRABARTI: So Cullen, hang on here for just a second. Because we want to once again get the Indonesian perspective in this conversation about Indonesia.

So in order to do that, we spoke with Mari Pangestu. She's currently a professor of international economics at the University of Indonesia. But from 2004 to 2011, Pangestu served as Indonesia's trade minister. And she says that Indonesia banned nickel ore exports for several reasons, including the fact that ore exports contain some specific inefficiencies.

MARI PANGESTU: If you export it as raw material, there's a lot of dirt in there that you're exporting and it's expensive to transport. So it does make sense for those who wanted to process nickel, to take it to the next step. So I guess from the government's perspective at that time, yes, we just want to accelerate what seems to be like, should be a sensibly commercial value policy.

CHAKRABARTI: The export ban also ensured that the added value from nickel processing stays in Indonesia. Pangestu says that value isn't simply economic. She says it strikes a political chord with many Indonesians.

As a formerly colonized nation, Indonesia endured generations where the nation's wealth was extracted from the land, and its people.

PANGESTU: We were colonized for 350 years. And then the next 70 years, we are just still producing commodities, which was the reason why we were colonized. Something has to change, that's the political rhetoric that resonates with people in a kind of a nationalism stance.

CHAKRABARTI: However, Pangestu is clear that Indonesia's future is more complicated than a simplistic black and white, pre- and post-colonial magic wand.

She says the government now must find a way to formulate the nuts-and-bolts policies to make Indonesia's lofty geopolitical ambitions a reality.

PANGESTU: For me, politics is politics. I'm an economist. I analyze good policy. I think it's fine to have a vision of increasing value added. That's very valid.

But let's be sensible about it. Let's see what should be the good policies and institutions that we need to build to make sure that we achieve that target without having high cost or impact, or ensuring that the gains are more evenly distributed and that we are not over exploiting, and we are not destroying the environment in the process.

CHAKRABARTI: That's Mari Pangestu. She's Indonesia's former trade minister and currently a professor of international economics at the University of Indonesia and a distinguished nonresident fellow at the Peterson Institute for International Economics. Cullen Hendrix, as Mari said there and as you've described, following the ban, Indonesia made several moves in order to get that value add from processing in the country, opening a lot of smelters, et cetera.

How would you evaluate how those nuts-and-bolts policies have unfolded so far?

HENDRIX: Oh, great. That's a great question. It is with the election of I think Prabowo who I think most viewed as being the continuity candidate. The Indonesian public has given you, I think, a pretty strong indication of how it perceives the effectiveness of these policies.

And on face, I think you can make the argument that they've actually been quite successful. So Jokowi claims that the institution of the export ban and the move into downstream activities has resulted in a 30-fold increase in the value of its exports. 30-fold is pretty significant, I think, by any relative standard.

It's also raised Indonesia's international profile. It's generated somewhere on the order of $30 billion in inward FDI, foreign direct investment, just in this sector. And foreign direct investment is like the manna from heaven for catalyzing growth at least over the last several decades in the world economy.

And it's been very important. And so it's helped catalyze it in that way. It's also generated pretty significant amounts of employment. So if we just look at, say, maybe smelting activities. In one Industrial Park, there are about 70,000 workers actively doing their jobs. And that's about twice what Boeing employees at the Everett Washington plant, which is the largest industrial facility in the world.

CHAKRABARTI: 70,000 people employed in one site for nickel processing in Indonesia. Amazing.

Cullen Hendrix, stand by for just a moment. When we come back, we're going to talk more about the risks that Indonesia is actually taking by relying so heavily on minerals and particularly nickel processing for the green energy future. And also, how the United States sees Indonesia using its leverage as the home to half the world's nickel reserves.

Part III

CHAKRABARTI: So Cullen, let's take a couple of minutes here to go through the various risks that Indonesia is also taking by really putting nickel near the center of its plans to increase its economic clout and better the lives of the Indonesian people. Because one of the major cons we started the show with today, and that is the environmental damage that's coming from this massive increase in nickel mining.

On Sulawesi, Habib told us that giant swaths of rainforest are just gone now. So can you talk more about some of the environmental concerns that are rising rapidly in the face of increased nickel mining?

HENDRIX: Sure. There are a variety of different kinds of nickel deposits and I'm the furthest thing from a geologist, so I apologize in advance to any geologist who are listening out there, but the kind of deposits that Indonesia has, the laterite deposits, are typically accessed through surface mining.

And this is exactly what most people think of when they think of mining. They think of a large open pit, heavy industrial machinery moving around, lots of dust and lots of what they call in the industry, overburdened. Being removed in order to get at the ore.

And this is having environmental impacts. On the first order is the land use change. So you're taking rainforest, which is, of course, a very important carbon sink, and part of climate mitigation in and of itself. And converting it to a different use, an industrial use, that's incredibly energy intensive. Mining itself is not where the eye-popping sort of energy intensity emerges.

It's in the smelting and the processing. Because of the high heat, high temperatures, and some of the chemicals that are involved. It has a relatively large environmental footprint, and that footprint is further enhanced by the fact that most of this is highly dependent on coal fired power.

All right. So we are building our green energy future by partially mortgaging our climate future in relying on coal to provide this service for us.

CHAKRABARTI: Yes. I've received emails all week long from listeners saying the truth is that transitioning to a green energy future means picking the best of the bad solutions that we have in front of us right now, to get through this transition, that nothing's perfect.

And that is a point well described or borne out by the Indonesian example. Now about those smelters. Another, I don't know if I'd call it a risk, but a tradeoff that Indonesia has undertaken, is that in the past, most of the raw ore was being exported to China. And now, is it most or at least many of the smelters that have been constructed in Indonesia are Chinese owned and run?

HENDRIX: Yes, that's correct. So if you look broadly at the mining, so the folks who are getting the material out of the ground, we've got companies from Brazil, from France, Japan, Korea, Switzerland, and China, all of which are engaged in the mining activities in the country. And some of these have ownership stakes for Indonesia, as well.

The Indonesian government actually just took over a majority ownership stake from PT Vales, which is a Brazilian company, their local subsidiary, and now owns the controlling share of one of Indonesia's most productive mines. In contrast, about 90% of the smelting capacity, in particular, the capacity that's particularly useful for getting the nickel up to the grade that's necessary for putting it into an EV battery, is Chinese dominated.

And that has a variety of implications for Indonesia, in terms of its continuing dependence on foreign direct investment, but then also technology and expertise coming from China, which is obviously a very important bilateral relationship for Indonesia. But is also one of the most significant kind of sources of concern for Indonesia and the international arena as well.

And at the same time, China's presence in the smelting activities, and to a certain extent the mining activities, are also a big part of why it is that Indonesia, I think, is going to be encountering very stiff headwinds, if not full-on gale-force winds, in trying to better integrate with the U.S. market and U.S. supply chains for green technology.

CHAKRABARTI: Yeah, so this is a really fascinating point. Because my goodness does history, it just echos, sometimes it screams through these hours that we're doing about elements needed for a green future. Because back in 1948, Mohammad Hatta, who was Indonesia's first vice president after their independence from Dutch colonial rule, apparently, he said that quote, "Indonesia is rowing between two reefs."

The implication being that it wouldn't take sides in the Cold War going on at the time. It sounds like, potentially, Indonesia could find itself in a similar place between the United States and China. So to that point we have this from Elina Noor, who's senior fellow with the Asia program at the Carnegie Endowment for International Peace.

She resists the idea that Indonesia is caught between China and the U.S. And she says right now, the issue is more about business and economics rather than what it was in during the Cold War, which was ideology.

ELINA NOOR: There isn't any ideological appeal that Jakarta feels vis a vis Beijing, I think, in the way that some folks in D.C. like to paint. It's just all business, right? It's about pragmatism. It's commercial enterprises, and it's building up Indonesia's own developmental record.

CHAKRABARTI: Cullen, respond to that.

HENDRIX: With all due respect, I think I would disagree. I don't think that this is all business. This isn't all politics either.

But if I were to put the two on ends of a continuum, I think it's probably a little closer to politics than it is to business. And the reason for that is that as we discussed earlier, the United States is trying to make its mark in these supply chains, as well. And it's trying to do so for a couple of reasons.

One of them is obviously concerned about climate change. A second reason is a concern that the world's climate future, the industrial capacity necessary to bring about the world's green energy transitions, is overly concentrated in China. And obviously bilateral relations between China and the United States have been better in the past than they are currently.

So that's a significant national security rationale that extends into U.S. policy here. And then and part of that means that the United States, in order to, or for electric vehicles to really unlock a lot of these tax incentives, those $7,500 credits that all of your listeners have been hearing about. You need to have some sort of domestic content, so domestic production, or it has to be sourced from a country that has a free trade agreement.

Indonesia does not have a free trade agreement. And even if it were to have a free trade agreement, because of the extensive penetration of Chinese firms in Indonesia's smelting sector, it would be an open question as to whether or not those minerals would qualify for those IRA tax incentives in the first case.

Because there's, yes, this is, I think, going to be one of the really challenging and unfortunately for your listeners, highly technical, arcane 'Inside Baseball' aspects of the energy transition. And any bilateral relationship between the United States and Indonesia.

CHAKRABARTI: I will say, though, that On Point sweet spot is the arcane, technical 'Inside Baseball' that actually ends up having an impact on all our lives. Cullen, one more question about the technical immediate future. Cause I mentioned this in passing before. I understand that also now, perhaps maybe because of the concentration of nickel in so few places, that EV battery makers are trying to develop technologies or working pretty aggressively to develop batteries that don't rely so much on nickel.

HENDRIX: That's correct. So if you think that the landscape, the geopolitical landscape that Indonesia is trying to navigate is a challenging one that's constantly in flux. I could argue that the landscape in the chemistry departments at the world's universities are an equally kind of dynamic landscape. That is going to determine, in some part, Indonesia's prospects to emerge as a green energy Titan.

And that is because of concerns about supply, either geopolitically informed or because prices are high. They were very high a couple of years ago. There's a strong incentive for researchers to come up with ways to substitute out of these. And so Tesla, as I think was mentioned in the earlier part of the segment, in an earlier segment.

Tesla is already making active decisions to move away from the NMC batteries. So these nickel manganese cobalt kind of batteries moving towards a lithium iron phosphate. Which allows them to take advantage of much easier to source more readily available, cheaper materials. And those are going to be going into the replacements for Tesla's Model 3 and Model Y, and some of its light trucks.

And as you already alluded to, Elon Musk voted with his feet and his investment in deciding not to locate his Southeast Asia hub in China. In Indonesia, choosing instead to locate it in Malaysia. And if we anticipate that the NMC batteries may be waning in their popularity and LFP may be taking over the market by 2030, that means that the boom that Indonesia is experiencing could potentially be short lived.

Of course, that assumes that prices for these harder to source materials stay high. And actually, they've come down substantially, as have prices for many of the battery minerals. So that's also a contested environment, but it does suggest that Indonesia can't bank on a nickel fueled century where demand will be just as high, and prices just as high.

A hundred years from now, as they are right now.

CHAKRABARTI: Right. One would assume that possible future would accelerate Indonesia's development of moving up the value chain, as you said a little bit earlier, being less relied, relying less on the actual nickel in the ground and more capable of adding value further down the chain, as you get closer to an actual electric vehicle.

Now, we want to talk a little bit about, as we move towards the end of the show, about what's happening elsewhere in the world, about nickel. Because as we've mentioned several times, even though Indonesia currently produces half of the world's nickel right now, unlike some of the other elements we've talked about this week, most notably cobalt, there are nickel reserves in other countries.

And that means international nickel buyers do have options. So Christopher Pollon is a mining journalist, and he wrote the book "Pitfall: The Race to Mine the World's Most Vulnerable Places." And he warns that Indonesia's current reliance on coal power, as we mentioned, to fuel its nickel industry, could push some nickel buyers to other markets.

CHRISTOPHER POLLON: A lot of Western companies are already a bit spooked by the reliance on really dirty energy to make something that's supposed to be green.

CHAKRABARTI: For example, the Philippines is looking to produce more nickel, as are some places in North America.

POLLON: In Canada, where I'm from, there's an area of northern Ontario called Sudbury.

That historically has had a lot of nickel, and it remains highly productive.

CHAKRABARTI: The Biden administration wants to create even more options. Jose Fernandez is the State Department's Undersecretary for Economic Growth, Energy, and the Environment. And he's been leading U.S. participation in the Critical Minerals Partnership.

That's a collaboration among 13 nickel consuming countries to invest in a more diverse and sustainable set of supply chains for nickel. And he told us about the risks that always come with over-reliance on a single supplier for anything.

JOSE FERNANDEZ: We saw what happened during COVID with the shortage of PPE, when we had one or two, one or two suppliers.

When you have one or two suppliers, it's like anything else, you're much more subject to natural disasters, earthquakes and the like.

CHAKRABARTI: Fernandez says the Critical Minerals Partnership, which began in 2022, initially considered some 200 potential projects in mining, mineral processing, and recycling all over the world.

FERNANDEZ: Last November in London, after looking at these projects and then focusing on where we could add value, we actually were able to bring four projects to reality.

CHAKRABARTI: One of those projects is a nickel processing facility in Australia. The Critical Minerals Partnership has 19 additional projects in the works, according to the State Department.

Then there's also the private sector, which is seeking to diversify nickel supplies. Currently, there's only one mine in the United States that produces nickel. That's the Eagle Mine in Michigan's Upper Peninsula. And the Eagle Mine is expected to close mid 2025. So yes, that would be next year. However, other proposed American nickel mines are in the works.

The eureka moment for the Tamarack Project was in 2008, when they actually first hit high grade nickel.

The Tamarack Project is a proposed mine in central Minnesota. Todd Malan is Chief External Affairs Officer and Head of Climate Strategy for Talon Metals, the company which operates the project. Since that 2008 discovery, Talon Metals has been working to secure permits, plans, and public consultation in order to open what he calls a, quote, responsible nickel mine on U.S. soil.

Malan also says the plan is to process that nickel ore in North Dakota using clean energy. Quite different, he says, from the coal powered smelters in Indonesia.

TODD MALAN: The CO2 intensity of Indonesia produced nickel is, in some cases, 50 or 60 times the CO2, embedded CO2, of what could be produced in Canada, the United States, or Australia.

That's a heavy burden to carry.

CHAKRABARTI: The Biden administration has publicly supported the Tamarack project, but the project faces opposition as well. The Mille Lacs Band of Ojibwe, with a nearby reservation, are advocating against the mine because they do have serious concerns that potential acid mine drainage could harm local waterways.

CHAKRABARTI: Cullen, we've just got about 15 seconds left. I'm wondering what thought you would leave our listeners with in thinking about the role nickel is going to play in the United States' clean energy future.

HENDRIX: People in the United States need to be honest with themselves about how far they are willing to push our own turn towards resource nationalism.

The United States did not get out of mining in a large way because we ran out of ore. The United States got out of mining because it was willing to outsource that dirty parts of production to other places. And so this is really about more than just geopolitics. This is about our fundamental obligations to and ownership of the decisions we make, and the impacts they'll have for our future energy security and for our future environment.