Key Takeaways
Without urgent intervention, tailings from nickel HPALs in Indonesia will hit 1.4 billion tonnes by 2035 — enough to cover the whole of Jakarta 1 metre deep. Annual HPAL tailings generation will soon exceed the volume of waste produced by the rest of the Indonesian mining sector combined.
HPAL Tailings are stored near industrial parks next to communities and coastal ecosystems rather than at remote mine sites. These tailings contain high levels of chromium — highly toxic to water supplies.
ESI supports a multi-pronged approach that links project development to environmental credibility, reduces overall volumes sent to storage and develops targeted regulations for higher standards at dry stack facilitates.
Executive Summary
Over the past six years, eight new nickel High Pressure Acid Leach (‘HPAL’) plants have been brought online in Indonesia with a further seven under construction and more than a dozen in the planning stages. In many ways, this is a significant achievement. Following a series of failed projects in the mid-2000s, the technology was widely considered to be too expensive or technically challenging. However, starting with Harita’s joint venture with Lygend in Obi Island, HPAL has made a remarkable comeback driving down unit-costs at industrial parks by utilising low-grade limonite ore and producing a valuable Mixed Hydroxide Precipitate (‘MHP’) product.
The downside is the process generates vast volumes of waste — on average, 118 tonnes of tailings for every 1 tonne of nickel. By comparison, the volume of waste from nickel RKEF[1] smelters is 95% lower. If all Indonesian nickel HPAL projects under construction and in planning stages ramp-up on similar schedules to those already in operation, the associated production would produce nearly 2 billion tonnes of tailings over the next ten years. Using more conservative production forecasts, still results in tailings of nearly 1.4 billion tonnes by 2035.
The sheer volume of HPAL tailings would be difficult for any country to manage let alone Indonesia with its high population density, wet tropical climate and frequent earthquakes. Many storage facilities are built and operated along way below international standards with the high moisture content of the tailings and inadequate drainage being the key issues.
There have already been three serious failures and four deaths, including a widely reported landslide at Morowali in 2025. What are now occasional headlines will become routine news as the number of tailings facilities increases from six today to around ninety by 2035. Tailings contain between 1 to 1.5 percent chromium, including a carcinogenic, water-soluble form that can affect nearby communities and coastal ecosystems.
Under Indonesian law, HPAL tailings is treated under the more general category of hazardous waste meaning that, unlike dams, dry stack facilities are not required to follow specific design and safety regulations. Moreover, HPAL plants now built in half the timeline of earlier designs and storage facilities are often rushed or unfinished by the time waste starts arriving.
To avoid an environmental catastrophe, Indonesia must urgently take action on HPAL tailings.
First, it must slow the pace of project development by implementing a review process. Second, it must adopt a consequence-based governance framework, drawn from international standards such as GISTM[2]. This framework sets requirements based on the harm a facility would cause if it failed, rather than the storage method it uses removing the loophole that lets dry stacking escape scrutiny. Third, it must set technical criteria for dry stacking. The criteria should cover what keeps a dry stack stable under Indonesian conditions, including moisture, drainage, foundation, zonation, slope and stack height.
These reforms can be housed within the existing permitting system and used to set a firm condition: that new HPAL refineries should not commission until their storage is built to standard, verified and able to hold at least five years of throughput. This makes the storage facility, not the processing plant, the reference for the pace of project development.
If implemented, new HPAL projects would need longer to reach production. These higher environmental hurdles will make more marginal projects less attractive. Between the slower pace of development and project cancelations between 183–796 million tonnes of tailings might be avoided by 2035 reducing the overall scale of the problem.
Regulation also raises the real cost of compliant storage improving the viability of processes like iron recovery, which could reduce the total volume of tailings sent to a storage facility by 21%. However, bridging the gap between proof of concept and deployment at a commercial scale will require government support. If action is taken quickly, this technology could reduce total 2035 volumes by 289 million tonnes — another significant contribution to reducing the scale of the HPAL tailings problem in Indonesia.
Indonesia must act now. Early implementation will be far less painful than suffering the full environmental consequences of poor tailings management. Once constructed, redesigning storage facilities and rehandling waste will be prohibitively expensive, opportunities to integrate recycling will be lost and some companies may play-for-time and wind-up rather than incur the costs of the environmental clean-up.
[1] Rotary Kiln Electric Furnace (RKEF) is the dominant nickel processing route in Indonesia, smelting saprolite ore into nickel pig iron and ferronickel for stainless steel.; [2] The Global Industry Standard on Tailings Management (GISTM), released in 2020 by ICMM, UNEP, and PRI, sets requirements for the design, operation, monitoring, and closure of tailings facilities, including dry stack storage
This paper is part of a series of analyses on Indonesia’s downstream mineral and industrial development. The Energy Shift Institute is publishing the series to highlight key developments, challenges and opportunities in the sector.
Reza Rahmaditio is an Analyst at the Energy Shift Institute, specialising in sustainability in the mining sector. He previously led the Critical Minerals portfolio at World Resources Institute Indonesia and worked as a consultant for the Indonesian government on decarbonisation and conservation policy.
Ian Hiscock is a Principal of the Energy Shift Institute. Ian is a mineral economist with a global profile. He started his career in London, spending more than 16 years working for global companies, banks and governments.
The Energy Shift Institute is an independent non-profit energy finance think-tank driving context, clarity and credibility for Asia’s energy transition pathways.