Displacement and loss of livelihood Wonorejo village is one of many areas impacted by the expanding concessions of Adaro's open-cut mining operations on the Indonesian island of Kalimantan (Borneo). With the help of police forces, Adaro began in 2010 to evict residents of land that fell within concessions that Adaro had bought to develop its mines in South Kalimantan. Nearly half of the island is under the control of mining companies.
With the village being converted into a net of coal settling basins for mine drainage, people lost both their homes and their livelihoods. Families had built a livelihood in the area for the past forty years, after a government-sponsored transmigration program had incentivised their relocation from over-populated Central Java. They were forced to leave the land that they had relied on for rubber tree cultivation, moving into unstable and poor working conditions elsewhere in Indonesia. This process was carried out with intimidation, little consultation and unfair compensation, according to people whose land was sold and homes and rubber plantations torn down. Former Wonorejo residents lamented being forcibly relocated to less fertile lands with young rubber trees, losing the potential future revenue from the mature rubber trees they had grown for decades in Wonorejo. While information is limited, these impacts are multiplied potentially across many more of Adaro's concessions. Since March 2022, the village has been deserted.

Carbon dioxide (CO2) emissions Adaro's annual coal production of over 54 million tonnes makes the company responsible for the emissions of an estimated 108 million tonnes of CO2 annually. Adaro alone is responsible for 0.28% of CO2 global emissions since the adoption of the Paris Agreement (2016-2022). In total, Adaro has over 1.1bn tonnes of coal reserves, equivalent to over 2.18 gigatonnes of carbon dioxide equivalent (Gt CO2e) emissions, almost equivalent to India's entire carbon footprint. Recent financial reports confirm that the vast majority of its revenue comes from coal mining. This directly contradicts the imperatives of the Paris Agreement and efforts to limit global warming to 1.5ºC. It is noteworthy that, despite the numerous announcements of its intention of “ceasing dependence on coal” and moving to renewable energy, the company is counting on sustained global and regional coal demand, and its plans rely on the continued exploitation of these reserves. In 2023, Adaro’s thermal coal production and sales increased by 5% and 7% respectively from 2022. Massive companies like Adaro, exploiting Indonesia’s vast coal reserves, are responsible for keeping the whole country’s economy still dependent, if not even addicted, to fossil fuels and non-renewable energy, with the financial contribution of Indonesian private and state banks. Indonesia’s energy consumption has historically been heavily dominated by non-renewable sources, but coal consumption even saw a sharp increase in 2022 (from 87.82 million BOE in 2021 to 299.19 million BOE in 2022).

Coal mine methane emissions In July 2024, a report by think thank Ember found that Indonesian coal companies are largely overlooking the significance of methane emissions from their mining operations. Ember found that only four out of the ten major Indonesian coal companies have been reporting their coal mine methane (CMM) emissions, and Adaro is not one of them. While the company reported 0.85 million tonnes CO2e from fossil fuel combustion and purchased electricity for its mining operations, Ember estimated that Adaro’s mines in 2023 emitted 1.58 million tonnes CO2e of CCM. Considering the devastating impact of methane as a greenhouse gas in the short period, with a 30x greater warming effect than carbon dioxide, this lack of reporting and mitigation of CCM emissions has terrifying consequences on our climate.

Captive coal and greenwashing tactics Importantly, Adaro also plans to develop and supply so-called captive coal plants. These off-grid energy generators are used for specific industrial installations, such as nickel or aluminium smelters. For example, Adaro's proposed captive coal plant for a North Kalimantan aluminium smelter will be one of the largest coal power plants in Indonesia by capacity, around 2.2GW. This has relevance for Adaro's climate impact because the projects are touted as having renewable credentials (supplying metals to renewable energy industries or being powered by hydropower, for example, despite still involving a 2.2GW coal plant), which Indonesian and international campaigners criticise as deliberate greenwashing. In April 2024, a massive social media campaign, promoted by activist group KPOP for Planet and addressed at Hyundai, pushed the Korean automotive company to severe a deal with Adaro for the purchase of the aluminium produced at the North Kalimantan smelter. Since the smelter will rely on coal for at least the first five years of operations, Hyundai declared that this would have violated its carbon-neutrality principles. 
In September 2024, Adaro announced the intention to sell 99.99% of its shares in its thermal coal mining unit, valued at USD 2.45 billion. This would mostly concern its subsidiary PT Adaro Andalan Indonesia (AAI). However, the company has yet to announce any coal production limit or a timeline for a complete exit from the coal business. Indeed, Adaro aims to expand operations in its metallurgical coal mining business, and it is currently planning to open new met coal mines in three concessions, in addition to its two already active concessions. Adaro's decision to divest from AAI thus appears as a tactic for the company to become more palatable to a new larger investor base, as obtaining financing for coal, fortunately, becomes increasingly difficult and companies face the growing pressure of the global energy transition. Adaro struggled to find the funding for its USD 2 bln aluminium smelter in South Kalimantan, as major global banks are stepping away from coal financing and Indonesian miners only manage to secure financing from domestic institutions.

Massive flood in South Kalimantan In January 2021, South Kalimantan was affected by massive flooding that killed at least 21 people and displaced more than 110,000 people away from their homes. According to LAPAN (National Institute of Aeronautics and Space of Indonesia), up to 200,000 hectares of area in South Kalimantan was flooded. The effects of extreme rainfall were exacerbated by degraded land and deforestation in the water catchment area caused by mining operations. Trees are essential to retain water and prevent soil erosion that could result in heavy silting of rivers during rains.
Adaro operates the largest single-site coal mine in South Kalimantan and is one of the mining companies that has caused the degradation of the Barito River catchment. Nine areas were flooded around Adaro’s concession. The Indonesian National Police is currently considering opening an investigation into whether mining activities caused the massive flood.

Mining outside of concession areas Adaro has a total official concession area of 23,942 hectares in South Kalimantan. However, a September 2024 report by corporate watchdog Ekō found that, according to satellite imagery, Adaro has expanded its mining activities to a further 3,194.43 hectares outside the concession area. Although the license allows supporting activities outside concessions, coal mining is prohibited. In addition, another 2,084.47 hectares of Adaro’s mining activity was found to be not only outside the permit area but also located in a Permanent Production Forest Area. Permanent Production Forest Areas are designated for timber production and may not be converted to pursue other activities such as mining without a special license. 
Furthermore, it was found that one of Adaro’s coal wastewater settling ponds is located a mere 150 meters from the village of Mangkayahu, in clear violation of environmental regulations, which mandate a minimum distance of 500 metres between the edge of a mine hole and residential areas.

Deforestation Adaro’s mining activities in South Kalimantan have caused deforestation of 8,131.47 hectares. The island of Kalimantan is largely uninhabited and covered by a luscious tropical rainforest. Adaro’s mining activities are causing massive loss of biodiversity and irreparable damage to these pristine ecosystems.

Tax avoidance The 2019 Global Witness report, Taxing Times for Adaro, found that Adaro Energy’s use of subsidiaries in low-tax countries could have the effect of reducing the amount of tax paid in Indonesia. The report argues Adaro Energy’s use of its Singapore coal trading arm, Coaltrade Services International, may have allowed the company to pay USD 125 million less in tax between 2009 and 2017. The report argues a further USD 45 million could have been paid in Indonesian taxes if Adaro Energy didn’t operate subsidiaries in Malaysia and Mauritius. This follows earlier reports of Adaro selling coal at below-market price to avoid tax.