By October 31, 2017 Read More →

Higher-grade nickel miners big winners in race to power EVs


BHP recently announced it will retool its Nickel West division to meet the needs of EV battery producers.  BHP photo.

Ferronickel and nickel pig iron unsuitable for battery production

Nickel miners the world over are hoping to cash in on the race to power electric vehicles, but according to a Reuters report, about only half of the producers will likely benefit.

High-grade nickel miners will be the big winners as EV manufacturers from Tesla to GM look install lithium batteries containing nickel in their cars.

But, miners of ferronickel and nickel pig iron, both unsuitable for battery production, will not be part of the EV revolution, according to analysts at UBS.

“Not everyone will be a winner,” Dan Lougher, chief executive of Western Areas told Reuters.

“We’ve met with quite a number of battery manufacturers, and they are quite specific on their requirements. Nickel is an important component of these batteries.”

Independence Group Ltd, a Western Australian mining company, is hoping to produce about 25,000 tonnes of high-purity nickel from a new mine.

Peter Bradford, chief executive of Independence Group says “The market dynamics will change in the coming years as a result of electric vehicles.”  He adds “Battery growth is going to disrupt the market,” he said.

This summer, Norilsk, the world’s largest nickel miner, announced a deal with BASF, a German battery maker.  Soon after, BHP announced it will retool its flailing Nickel West division and expects to start shipping nickel to battery manufacturers by April 2019.

Slated for closure in 2019 due to once-flagging markets, a revived Nickel West expects demand for EV batteries to make up 90 per cent of the division’s annual output of 100,000 tonnes within the coming six years.

Some producers of higher-grade nickel are building plants to convert the metal into powder-like sulfate which is suited to batteries.  Sulfate nickel is often valued higher than London Metal Exchange (LME) nickel.

Benchmark prices on the LME jumped 17 per cent in the year to date, rising to $11.725/tonne.  Despite the increase, prices still sit below the 2014 peak of over $21,400 and well off the all-time high of just over $51,000 reached in 2007.

According to Reuters, the LME said this week that it may offer a nickel contract targeted at the battery market.

Porsche says it expects the ratio of nickel to cobalt and manganese in a typical EV battery to increase eight-fold as the popularity of electric vehicles rises.

UBS forecasts 15 million EVs will be on the road by 2025.  This would mean nickel demand would increase by 10 to 40 per cent of the current market.

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