Electric Vehicle Manufacturers Face “Nickel Pickles”

Electric Vehicle Manufacturers Face Nickel Pickles
Electric Vehicle Manufacturers Face Nickel Pickles - A nickel mine site on Obi Island.

Nickel is required in enormous quantities for electric vehicle batteries, but its extraction and refining often requires the destruction of rainforests and the release of significant amounts of carbon.

This dilemma is referred to as "nickel pickling" in the electric vehicle industry.

Companies have to extract and process large amounts of nickel to create batteries for electric vehicles. However, the extraction of the mineral from the soil and the production of suitable materials for batteries are environmentally damaging processes. Large areas of rainforest must be cut to reach nickel. The extreme heat and high pressure used in the refining process lead to waste slurries that are difficult to dispose of.

The nickel debate underscores a larger paradox in the electric vehicle industry: while electric vehicles are intended to cause less damage to the environment in the long run than conventional vehicles, the manufacturing process of these vehicles significantly harms the environment.

Nickel mining often requires clearing woodlands.

The conflict is spreading to the mineral-rich islands of Indonesia, which is by far the world's largest source of nickel. These beds are not deeply buried; rather they are found near the surface, hidden by long paths of interlocking trees. Access to nickel is simple and inexpensive after the trees are cleared.

Five years ago, a mine in Indonesia called Hengjaya was given permission to expand its operations into a forested area almost three times the size of Central Park in New York.

According to Nickel Industries, the mine's Australian owner, the removal of rainforests in 2021 resulted in greenhouse gas emissions equivalent to 56.000 tons of carbon dioxide. According to calculations made by The Wall Street Journal using statistics from the US Environmental Protection Agency, this figure is equivalent to operating approximately 12.000 conventional cars for a year.

According to Nickel Industries, the Indonesian government has allowed mining here because of illegal logging, which is causing damage to the forest area it clears. The business claims to have put a lot of effort into land rehabilitation, including planting more than two million trees, and states that the Indonesian government commends its environmental management efforts with awards.

Muchtazar, who, like many Indonesians, goes by a single name, is the company's sustainability manager. “Unfortunately, all open pit mining processes, including our operations, require land clearing,” he added. He said that the use of nickel in eco-friendly batteries offsets the negative effects.

In a report published in April, Tesla said that one of the reasons electric vehicle production generates more emissions than conventional cars is due to the extraction and refining of minerals. However, according to the company, it only takes less than two years of driving time for an electric vehicle's total emissions to be lower than that of a comparable internal combustion engine vehicle.

The analysis indicated that nickel is responsible for more than a third of the carbon emissions produced during the manufacture of a typical battery cell, more than any other material and manufacturing process.

Before 2018, the majority of nickel used in electric vehicles came from non-equatorial countries such as Canada and Russia. Here, sulfur nickel is generally higher grade and easier to machine than other types. Mines are expensive and take a long time to develop because they are often underground.

Auto executives were concerned about having enough nickel to meet the expanding demand of the electric vehicle market. Human rights organizations and the media have abandoned cobalt, another component of batteries, after exposing widespread child labor in cobalt operations and the dangerous working conditions faced by miners in the Democratic Republic of the Congo. Automakers have reduced the cobalt content of batteries by increasing the nickel content.

“All the mining companies out there, please mine more nickel, okay?” Tesla CEO Elon Musk placed the order during an earnings call in 2020. As demand increased, nickel prices skyrocketed.

By then, Chinese businesses had begun to seek access to a large but challenging supply.

Millions of years ago, tectonic plates collided in what is now eastern Indonesia, bringing the ocean's mineral-rich seafloor to the surface and producing the nickel richness it is today. The region is covered by a rainforest with vegetation that has evolved specifically to survive in nickel-rich soils. The maleo, a pink-breasted bird that bury its eggs where they will be cooked by geothermal energy, and the anoa, the world's smallest wild cattle, are just two examples of the many species endemic to this region.

Electric Vehicle Batteries and Environmental Problems

However, this laterite nickel was not particularly suitable for electric vehicles. Chinese businesses have focused on a procedure known as high-pressure acid leaching, or HPAL, that converts this type of nickel into components for electric vehicle batteries. This method has been used for a long time, but it had some glitches.

If Chinese engineers and scientists can build plants on a large scale, they can make the transition to electric vehicles.

China's Lygend Resources and Technology submitted this offer to Indonesian miner Map Group when the two businesses were considering building the facility, which will be Indonesia's first HPAL facility, in 2018. Indonesia's policy of banning crude nickel exports in 2020 and mandating businesses to operate domestically has encouraged such investments.

At least two more Chinese businesses plan to establish billion-dollar nickel businesses by 2021, and more would be developing concepts. The projects immediately gained momentum.

Indonesia produced more than half of the nickel used in electric vehicle batteries produced last year, according to CRU, a London-based company specializing in commodity trading. In 2017, this ratio was between zero and 5%. According to the CRU, this rate will rise to over 2027% by 80.

Problems Created by Nickel Production

There are now pressing new environmental concerns as a result of the nickel rush. In the HPAL process, nickel ore is dipped in sulfuric acid and heated to over 400 degrees Fahrenheit under extremely high pressure. This nickel production method uses about twice as much carbon as sulfide nickel extraction and processing from sources such as Canada and Russia. A different method of laterite ore processing, where coal-fired furnaces are often used, has six times the carbon density, according to the International Energy Agency.

How to dispose of the processed waste is another issue that businesses have to deal with. It is difficult to contain waste safely in tropical countries because frequent earthquakes and heavy rains can upset the soil balance and cause waste dams to collapse. A regulation adopted in Indonesia in 2018 allows businesses to apply for permission to dump garbage from mineral processing into the ocean.

Environmentalists have fought against this practice, as they believe it can pollute the seas in eastern Indonesia. According to Septian Hario Seto of the Ministry of Maritime and Investment Affairs, no request for the disposal of deep-sea effluent from HPAL facilities has been and will not be accepted because the components of the waste do not meet the requirements for ocean discharge.

The Indonesian government confirms its commitment to complying with environmental regulations and accuses businesses of illegal mining in protected areas. Authorities recommended earlier this year that nickel industry executives allow the construction of military and police facilities close to their operations to ensure better control, according to an official presentation viewed by the Journal.

China's Competitive Position in Electric Vehicle Production

At a time when relations between Washington and Beijing are deteriorating, Western electric car firms are worried about China's dominance of nickel processing in Indonesia. Since there are very few nickel production facilities in the United States, the U.S. government declared nickel an essential mineral last year whose supply could be disrupted.

Ford Motor Company announced in March its intention to invest in a nickel processing plant on Indonesia's nickel-rich island of Sulawesi. The company claimed that this investment will enable it to meet its goal of producing approximately two million electric vehicles by 2026.

The main organization behind this effort is a Chinese firm. The Indonesian subsidiary of Brazilian mining company Vale worked closely with Japanese Sumitomo Metal Mining for several years to build the project. But problems arose with the alliance. An agreement between Vale and a Chinese company, Zhejiang Huayou Cobalt, to build a nickel HPAL plant, which Vale claims will be larger than what is currently in operation, followed Sumitomo's withdrawal from the project last year.

According to a Sumitomo representative, timing issues led to the cancellation of the project. According to a Vale spokesperson, the business collaborated with Zhejiang Huayou because the project was more important.

According to Lisa Drake, a senior Ford official, “this framework gives Ford direct control to supply the nickel we need in one of the industry's most cost-effective ways, and allows us to ensure that nickel is mined in line with our company's sustainability goals.”

Alongside German chemical giant BASF, French miner Eramet is in the early stages of setting up a nickel factory. Eramet's chief development officer, Geoff Streeton, stated that the company is not looking for a Chinese partner, but its strategy is to capitalize on "what Chinese engineering companies have come up with." The proposed plant will use ore from a mine whose main shareholder is a Chinese enterprise.

According to Mr. Streeton, clearing the land for mining is a necessity. “Our goal is to achieve a biodiverse result,” he said.

Source: The Wall Street Journal

📩 07/06/2023 11:21