Volvo Cars Pledges Transparency Amid Nickel Sourcing Concerns
Currently, approximately half of the nickel produced globally originates from Indonesia, with the Halmahera mine rapidly expanding and being touted by its owners as the largest in the world.
However, the extraction process carries severe consequences for both local communities and the environment. Rainforests have been decimated, and the indigenous Hongana Manyawa people face potential extinction, according to human rights activists.
A significant portion of the processed nickel from Halmahera is shipped to China. Various electric vehicle manufacturers, including Tesla, Ford, BMW, Volkswagen, Hyundai, Kia, and Geely, have been identified in reports as possible end-users, yet none have confirmed the use of nickel from this site in their batteries.
Indonesia is currently the leading global producer of nickel.
In recent years, Volvo Cars has positioned itself as a frontrunner in tracing the origins of battery metals and maintaining transparency with its customers. The company's sustainability chief emphasized the importance of leading in this area.
Despite this commitment, Volvo has been reticent when questioned about the source of its nickel. While some batteries in the EX30 model are reportedly made with Indonesian nickel, the company has refrained from disclosing the specific mine or smelter involved.
Volvo's press chief stated that they have not yet established an agreement with the mine and subcontractor to publicly communicate their collaboration.
Meanwhile, open-pit mining on Halmahera continues to encroach upon indigenous lands. Currently, around 40 billion SEK is being invested in new mines, processing industries, and factories for battery components on the eastern side of the island. Survival International has likened this massive project-- inaugurated by Indonesia's president over the summer--to a death sentence for the Hongana Manyawa people.
The consortium behind these investments is led by CATL, the world's largest electric vehicle battery manufacturer and a key partner for Volvo Cars. The Swedish manufacturer had already signed a long-term multibillion-dollar agreement with CATL in 2019. According to trade data from the Dutch organization SOMO's research service The Counter, Volvo ordered approximately 41,000 batteries from CATL last year for its factories in Belgium and the USA.
Volvo Cars has committed to following the UN's guiding principles for business and human rights, which implies that the company is responsible for acting when a business partner violates these principles, and that partnerships may need to be terminated if necessary.
When asked how its collaboration with CATL aligns with this commitment, Volvo's press chief noted that the company takes these issues seriously. They clarified that CATL does not currently supply batteries with nickel sourced from Indonesia, but they maintain ongoing discussions regarding their partnership.
Ellen Moore, program director for mining at the American environmental organization Earthworks, argues that Volvo has a duty to ensure that nickel sourced from Indonesia does not infringe on the rights of indigenous peoples or harm the environment. She remarked that commitments that exist only on paper do not rectify supply chain issues or mitigate damage caused by mining activities.
The EU has decided to tighten regulations for car manufacturers to scrutinize their supply chains and prevent human rights violations and environmental damage. From 2027, battery passports will become mandatory, requiring each battery to provide information about its origin and sustainability.
Krista Shennum, a researcher at Climate Rights International, insists that Volvo must disclose its sourcing practices immediately. She emphasized that the demand is not for business specifics such as prices or volumes but rather for transparency regarding the mines from which they procure materials. She noted that if Volvo presents itself as a leader, it should openly share the origins of its minerals.
Attempts to reach CATL for comments have gone unanswered.