Indonesia bars nickel mining at top diving spot

Indonesia has revoked four out of five nickel mining permits in Raja Ampat, one of the country’s most prized diving and snorkelling destinations, following mounting environmental concerns and pressure from local communities.

The decision, announced Tuesday by Energy and Mineral Resources Minister Bahlil Lahadalia after a Cabinet meeting, immediately halts operations by Anugerah Surya Pratama, a subsidiary of China’s Wanxiang Group; and Indonesian companies Nurham, Kawei Sejahtera Mining, and Mulia Raymond Perkasa.

According to Lahadalia, three of the companies had held permits since 2013, while Nurham had received approval this year but had not yet begun production.

Indonesia has become the world’s top producer of nickel, a key metal for electric vehicle batteries and stainless steel, as global demand for energy transition minerals accelerates. Backed by foreign investment and government policy favouring local refining, the country has rapidly expanded its nickel mining industry, particularly in Sulawesi, a large island in central Indonesia, and Papua, the western half of New Guinea island.

But the boom has raised alarms over environmental destruction, deforestation and marine pollution, especially in biodiverse regions like Raja Ampat. Critics say lax enforcement and overlapping permits have enabled ecological harm that threatens Indigenous communities and tourism, prompting recent government moves to tighten oversight.

Gag Nikel

Only local Gag Nikel will continue operating in the region. Its mine on Gag Island lies about 42 km west of Piyanemo, one of Raja Ampat’s most popular marine tourism spots. Gag Nikel, which holds a 130-sq.-km concession, produced around 3 million tonnes of nickel in 2024 and is expected to maintain that output through 2026.

Despite being spared from the sweeping revocations, Gag Nikel was temporarily ordered to pause activities last week amid protests over mining in the ecologically sensitive region. It remains unclear whether that suspension has been lifted.

The clampdown follows a January report by Climate Rights International, which alleged the Indonesian government was allowing environmental degradation and human rights violations by nickel miners, particularly in the eastern Maluku Islands.

Raja Ampat, an archipelagic district in Southwest Papua province, spans nearly 20,000 sq. km and is home some of the planet’s richest marine biodiversity, including 75% of the world’s coral species and more than 1,600 species of fish. It is a designated a UNESCO Global Geopark and includes marine protected zones overseen by the Ministry of Marine Affairs and Fisheries.

Indonesia has rapidly expanded its nickel sector to support the global electric vehicle boom, growing from just two smelters a decade ago to 27 today, according to S&P Global Commodity Insights. The country now supplies well over half of the world’s nickel output and has another 22 smelters in the pipeline.