Indonesia’s nickel boom tests Western green sensibilities (The Economist – April 13, 2023)

Making batteries for electric vehicles requires environmental and geopolitical trade-offs

In a miserable year for initial public offerings, Indonesia’s capital is turning heads. The Jakarta Stock Exchange enjoyed record IPO volumes in the first quarter. The $800m raised in these flotations outstripped the sums drummed up on Hong Kong’s or New York’s stock exchanges in the same period.

The bulk of the money came from the listing of Pertamina Geothermal Energy, a green subsidiary of the state oil-and-gas giant. It may have been just the start of Indonesia’s clean-energy IPO boom. On April 12th Harita Nickel, a firm that processes the battery metal, pulled off the country’s biggest IPO in almost a year, raising nearly $700m at a valuation of around $5bn. Later this month Merdeka Battery Materials, another nickel firm, aims to raise more than $500m.

Nickel is at the centre of Indonesia’s efforts to become a clean-energy superpower. The country has one of the world’s two largest reserves of the stuff. In an attempt to capture more of the higher-margin markets for metal-processing and battery-making, a decade ago the government banned the export of raw nickel ore.

Harita’s and Merdeka’s blockbuster IPOs show that the policy is having an effect. But the industry also highlights some of the uncomfortable trade-offs involved in the global battery business.

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