On September 27, 2023, a syndicated loan totaling 25 billion yen was announced as a “green loan” with Sumitomo Mitsui Banking Corporation as lead manager and Sumitomo Mitsui Trust Bank as co-lead manager. The loan was for Sumitomo Metal Mining Co., Ltd. (SMM) to build a new plant in the Besshi district of Niihama City, Ehime Prefecture, to increase production of cathode materials for rechargeable batteries used in electric vehicles, and also to expand facilities at the existing plant.

In the current climate change crisis, the realization of a decarbonized society is an urgent task, and companies in Japan and abroad are working to develop and distribute various decarbonization technologies to achieve this goal. This loan is positioned as a part of such efforts. However, research by Fair Finance Guide Japan (FFGJ) and its partner, Friends of the Earth (FoE) Japan has revealed significant human rights problems at the mines from which the nickel material that is highly likely to be used in this supposedly “green” plant will be sourced.

The Sorowako Nickel Mine in Indonesia is a mine that already supplies nickel matte to SMM. The open-pit nickel mining operation there has been negatively impacting the land and traditional lifestyles of Indigenous People, and it has been confirmed that the expansion of the mine is causing material impact on local agriculture while also contaminating the water supply for local residents with carcinogenic heavy metals. In addition, Indigenous Peoples who protest against these issues have been unjustly arrested and detained. (For more information, please refer to the FFGJ case study report published in 2023)

In addition to this, in order to meet the growing demand for nickel, plans to expand the mine into areas that have yet to be mined have been in full swing since early 2022.

To read the full report, click here.