Full Breakdown
Investors Urge Action on Nickel Mining's Environmental and Human Rights Risks
4/9/2026, 1:11:35 PM
Overview of Nickel Mining Concerns
Nickel, a crucial component in electric vehicle (EV) batteries, is facing increasing scrutiny due to its extraction practices, particularly in Indonesia and the Philippines. Environmental organizations such as Mighty Earth, Climate Rights International, and Global Witness have raised alarms about the detrimental effects of nickel mining, including deforestation, pollution, and human rights violations. Allegations include illegal forest clearing, failure to adhere to free, prior, and informed consent (FPIC) protocols, and violence against local communities opposing mining activities. As demand for nickel is projected to rise significantly—expected to reach 40-50% of total demand by 2040—concerns about these practices are intensifying.
Investor Actions and Responses
In response to these issues, a coalition of investors, now numbering 36 and representing approximately $4.5 trillion in assets, has called for enhanced environmental and social due diligence in nickel supply chains. They are advocating for mandatory FPIC and independent audits of mining operations. Notably, Norges Bank Investment Management, Norway’s sovereign wealth fund, excluded French mining company Eramet SA from its portfolio due to concerns over its involvement in the PT Weda Bay Nickel joint venture, citing "unacceptable risk" of environmental damage and human rights violations.
Eramet has defended its position, stating it is a minority shareholder and does not have unilateral decision-making power. The company claims to be aligning with the Initiative for Responsible Mining Assurance (IRMA) standard, which emphasizes the involvement of NGOs and Indigenous peoples in mining practices.
Industry Initiatives and Standards
In light of the growing pressure, some automakers have begun implementing measures to improve the sustainability of their nickel supply chains. In September 2025, Mercedes-Benz, Volkswagen, and BMW launched the Nickel Impact Program Indonesia, aimed at enhancing local health services and water access while promoting biodiversity research. Mercedes-Benz has committed to sourcing nickel exclusively from IRMA-audited mines, while Volkswagen is advocating for IRMA standards within its supply chain.
However, concerns persist regarding the emergence of alternative standards, such as the Consolidated Standard Mining Initiative (CSMI), which may lack the same protections for Indigenous rights as IRMA. Critics, including Jasmine Puteri from Rainforest Foundation Norway, warn that some mining companies are gravitating towards CSMI, potentially undermining progress made under IRMA.
Broader Implications and Future Outlook
The situation surrounding nickel mining is further complicated by the EU's Corporate Sustainability Due Diligence Directive (CSDDD), which some argue has positively influenced mining practices. However, there are fears that recent weakening of the directive may lead to reduced transparency among automakers. Mark Mistry from the Nickel Institute highlights that the demand for nickel and cobalt in EV batteries remains high, emphasizing the need for sustainable practices as the green transition progresses.
As the global demand for nickel continues to rise, the intersection of environmental sustainability and human rights in mining practices will remain a critical area of focus for investors, automakers, and advocacy groups alike.
Verbatim Quotes
- “The expectation is that this trend will continue for the foreseeable future,” — Chris Schlekat, Executive Director, NiPERA
- “Our concern follows several mining companies signalling interest in signing up to CSMI.” — Jasmine Puteri, Senior Supply Chains Adviser, Rainforest Foundation Norway
- “Part of the green transition is sustainable mobility, but the shift towards low-carbon electricity provision comes with significant raw materials demand,” — Mark Mistry, Director of Public Policy and Sustainability, Nickel Institute
