Norway’s Wealth Fund Excludes Eramet on Nickel Mining Risks

Lead Norway’s Government Pension Fund Global has excluded French miner Eramet from its portfolio, citing environmental and human rights concerns tied to Indonesian nickel operations, the fund announced on September 13 in Oslo.

Nut Graf The move underscores growing scrutiny of critical-minerals supply chains and reflects increasing investor focus on sustainability standards in nickel production.

Market Response

  • Eramet shares slipped 1.8% in Paris trading following the announcement.
  • Analyst forecasts suggest limited short-term impact on nickel supply but potential reputational costs for Eramet.

Regulatory Crackdown in Indonesia On September 12, Indonesian authorities seized 148 hectares of PT Weda Bay Nickel mine part-owned by Tsingshan Holding Group and France’s Eramet, alleging permit violations. The action rattled investors and highlighted supply risks in the world’s largest nickel-producing nation.

Supply-Chain Implications Indonesia controls over 50% of global nickel output. Recent government enforcement efforts, including forestry permit reviews, have created uncertainty for smelters and refineries, vital for stainless steel and electric-vehicle battery supply chains.

Price Movement Nickel futures on the London Metal Exchange rose 0.79% to $15,340 per tonne on September 12, driven by regulatory jitters and a modest rebound in downstream demand. However, elevated LME inventories suggest volatility may remain contained in the near term.

Broader Sustainability Concerns Norway’s exclusion decision follows pressure from environmental groups over deforestation and social impacts in Indonesian nickel mining regions. The fund’s guidelines bar investments linked to “severe environmental damage” and “gross violations” of human rights, signaling a tougher stance on green-metal producers.

Investor Takeaway The exclusion of Eramet signals that compliance with environmental and social governance (ESG) standards is becoming as critical as operational performance for miners in politically sensitive jurisdictions.