FINI warns HPAL tailings could strain Indonesian nickel parks within three years

By Dominikus

Indonesia’s nickel industrial parks could face growing pressure from HPAL tailings management within the next two to three years as mixed hydroxide precipitate (MHP) output expands and dry-stack disposal requires significant land, Arif Perdana Kusumah, Chairman of the Indonesia Nickel Industry Forum (FINI), said during a panel discussion at the Indonesia Critical Minerals Conference in Jakarta on Friday.

Arif said environmental compliance costs differ between pyrometallurgy and hydrometallurgy. For RKEF-based pyrometallurgy, the main issue is carbon emissions. For hydrometallurgy, including HPAL operations, the biggest challenge is tailings management.

“One of the biggest issues for hydrometallurgical operations in Indonesia is how to manage tailings,” Arif said.

He said Indonesia only allows dry-stack tailings for HPAL operations, while proposals for tailings dams or deep-sea tailings disposal are unlikely to be accepted by the government.

Dry-stack tailings, however, create challenges for HPAL operators because they require large areas of land, he said.

Arif said Indonesia’s current HPAL output stands at around 600,000 tons, while nickel contained in MHP could reach around 1 million tons by 2028.

He said hydrometallurgical processing can generate around 150 tons to 160 tons of tailings for every one ton of nickel produced, creating a significant land and environmental management burden for industrial parks.

 “You can imagine how difficult it is to manage the tailings in HPAL operations,” he said.

Arif said FINI had held extensive discussions on the issue and expected new regulations to provide clearer guidance on how tailings should be managed more properly.

 “I think in the next two or three years, many industrial parks will face difficulties in managing tailings, again because the available land will not be sufficient to accommodate the entire operation,” he said.

Read also: Rising ore costs, sulfur prices, RKAB limits threaten Indonesia nickel industry

He said dry-stack tailings have become a major component of environmental costs for Indonesia’s HPAL industry.

The warning comes as Indonesia continues to expand its battery materials industry, with HPAL projects playing a key role in converting limonite ore into MHP for the electric vehicle battery supply chain.

Arif said HPAL technology had also helped Indonesia add significant usable resources by allowing limonite, previously treated as waste material, to be processed into battery-grade nickel products.

Before HPAL technology was implemented in Indonesia in 2021, limonite had long been categorized as waste material because it could not be used commercially, he said.

“After HPAL technology was implemented in Indonesia starting in 2021, the limonite layer could be processed, and it is now even possible to produce nickel products that meet battery-grade specifications,” Arif said.

He said FINI calculated that HPAL technology had added around 2 billion tons of ore resources from limonite alone, with further upside possible.

Ali Safdar, Managing Director and Partner at Boston Consulting Group, said in the same panel that ESG requirements are becoming increasingly important for nickel producers, particularly for Class I nickel used in battery supply chains.

He said offtakers and original equipment manufacturers, especially from the United States and Europe, are becoming more demanding in ensuring that nickel entering their supply chains carries an acceptable ESG footprint.

Safdar said ESG was becoming a “right to play” for nickel miners rather than a voluntary advantage, adding that ESG challenges go beyond coal-fired power and also include tailings and sulfur.

Arif said Indonesia’s nickel industry still needs to put more effort into exploration, including the search for possible nickel sulphide deposits, while also improving the way existing laterite resources are processed and managed.

Editing by Reiner Simanjuntak