Indonesian miners are turning to high-pressure acid leaching to produce nickel for batteries, but their waste management plans will face a major challenge in a wet environment and may put the nation's waterways at risk, experts told S&P Global Commodity Insights.

The Southeast Asian country, which produces 37.9% of the world's nickel, implemented a ban on nickel exports in 2020 as part of a concerted effort to move up the nickel value chain and attract refining and battery manufacturing. With a global boom in electric vehicle batteries underway, Indonesia is expanding to the production of intermediate materials for battery-grade nickel sulfate.

The Indonesian nickel sector is at the start of an investment cycle with about $30 billion in announced investments, more than half of which will be in high-pressure acid leaching (HPAL) processing facilities, S&P Global Ratings said March 13.

HPAL uses sulfuric acid to recover nickel and cobalt from low-grade nickel laterite ores. The technology, while effective, produces a high volume of fine-particle waste that is challenging to dispose of.

Some companies opt for dry stacking the waste, which involves filtering and drying the tailings to a point where they can be compacted and stored in a stable and dry state. But experts said the method carries the risk of contaminating water supplies in wet environments.

"In terms of above-ground permanent tailings storage, we're pushing a worst-case scenario in Indonesia because we are combining all the risk factors," Steven Emerman, owner of Malach Consulting, told Commodity Insights. "Very high rainfall, high seismicity, it tends to have very steep topography [and] a lot of volcanic soils that are very soft."

HPAL waste management concerns

The International Energy Agency said in its 2021 report, "The Role of Critical Minerals in Clean Energy Transitions," that Indonesia would lead nickel's global production growth, but tailings disposal will remain a key challenge.

For every metric ton of nickel produced through the HPAL process, about 1.4 metric tons to 1.6 metric tons of tailings are generated, Angela Durrant, principal analyst at Wood Mackenzie, said in an April 4 note.

The waste from HPAL is prone to creating liquid runoff, or effluent, due to its fine particles and semistable form, Lyle Trytten, president of Trytten Consulting, told Commodity Insights.

Disposing of these tailings in a wet climate makes drying them for storage a difficult but necessary task to avoid local groundwater contamination, both Trytten and Emerman said. Disposal requires extensive tailings treatment, elaborate storage and seepage control, Trytten said in a report.

"The original schemes [for mine waste management] involved proposals for deep-sea tailings disposal, but Indonesia has thus far followed a policy of not issuing new licenses for deep-sea disposal," Matthew Piggott, head of nonferrous metals research at Skarn Associates, told Commodity Insights.

In 2021, Indonesia barred deep-sea tailings disposal due to its environmental dangers.

"That currently leaves storage on land," Piggott said. "There is obviously the space issue to liberate tailings sites," where areas need to be mined out first before they can be used to store tailings.

Piggott also echoed other experts' concerns over tailings management in an area with a wet climate and seismic activity. "These are problems which the mining operators will have to solve."

Indonesia's mining ministry did not respond to requests for comment on dry stacking of tailings.

Producers consider dry stacking

Vale SA plans to dry stack tailings at its two planned HPAL joint ventures with Zhejiang Huayou Cobalt Co. Ltd. at Sorowako and Pomalaa. "PT Vale Indonesia Tbk will leverage Vale's experience with dry stacking technology to ensure the best tailings solution is implemented," Vale told Commodity Insights in an email. Vale implemented dry stacking at its Vargem Grande iron ore complex in Brazil.

Lygend Resources & Technology Co. Ltd. is considering dry stacking at its HPAL project in Obi Island, according to a report by Wood Mackenzie. Lygend did not respond to a request for comment.

BASF SE "has not yet decided" whether they will follow through with plans for a HPAL project at Weda Bay with partner Eramet SA, and LG Energy Solution Ltd. said its project is still in the early stages and does not yet have a tailings plan, both companies told Commodity Insights.

Indonesia's climate to test tailings management

Dry stacking for HPAL tailings has already been implemented in a wet environment at Comilog International SA's Moanda mine in Gabon, a tropical country with an average annual precipitation of 1,867 millimeters between 1991 and 2020. However, that comprises just two-thirds of Indonesia's average yearly rainfall of 2,782 millimeters over the same period, according to the World Bank data.

The method has also been tested at other tropical sites, such as Prony Resources New Caledonia consortium and Sumitomo Metal Mining Co. Ltd.'s Coral Bay HPAL in the Philippines, but "tests and trials don't count as successful operations," said Emerman.

"When you do it in a lab, there's always questions. Will it be the same material when we build a commercial plant?" said Trytten, who had worked on HPAL projects in the 1990s and 2000s.

Environmental advocates also worried about whether the technology would be viable.

"There are serious questions as to whether or not filtered tailings are viable in [Indonesia's] environment, and any tailings management options, including filtered tailings, present risks and requires the use of best practice technologies, independent oversight and transparency to protect people and the environment," Ellen Moore, the international mining campaign manager at Earthworks, a clean energy NGO, told Commodity Insights.

Emerman also warned about building tall dry stacks in a wet climate.

"It's possible to drain the water at the filter tailing stack, but the industry has to learn how to do it. You can't immediately build the tallest filter tailing stack ever in the wettest climate ever," Emerman said. "You have to do these things slowly. You have to do these things in stages."

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