Ground Breakers: Andrew Forrest’s nickel miner Wyloo gears up for growth
Andrew Forrest’s nickel miner Wyloo Metals has beefed up its management team and pulled its businesses under a single umbrella as it outlines a plan to become a major non-Russian player in nickel sulphide production and downstream battery nickel.
Funded by the Tattarang investment house owned by Forrest and separated wife Nicola, the one-time passive investor has become an operator of nickel assets in the past two years after an aggressive M&A strategy made it the owner of Canada’s Noront Resources in a competitive process against BHP (ASX:BHP) and then snared the $760 million acquisition of WA nickel producer Mincor Resources.
The move will see Ring of Fire Metals, the owner of a major undeveloped nickel and chromite district in a far-flung corner of Ontario, Kambalda nickel operations owner Mincor Resources and the Wyloo Metals corporate team come under the singular banner of Wyloo.
It marks a shift forward for the company backed by the iron ore, agriculture and green energy billionaire, which has long been the source of speculation it could pursue an IPO, something rebuffed by CEO Luca Giacovazzi at the Diggers and Dealers Mining Forum in Kalgoorlie in August.
The closure of the Mincor deal will see Wyloo supply in the vicinity of 15,000t of nickel metal a year for BHP’s Nickel West business at least until an offtake deal winds up in 2025.
Beyond that, Wyloo is studying a potential precursor cathode active material plant in Kwinana in partnership with fellow WA nickel lynchpin IGO (ASX:IGO).
“We are now producing around 15,000 tonnes of nickel from our mines in Western Australia which, together with our Eagle’s Nest project in Ontario, will ensure we remain a significant nickel producer for at least 20 years,” he said in a statement today.
“Our project with IGO to build Australia’s first integrated battery materials facility in Kwinana will also see us expand downstream to produce precursor cathode active material (PCAM) via a low-cost and low-carbon process for the electric vehicle battery industry.
“We plan to do the same in Ontario, supported by long-life production from Eagle’s Nest.
“We’ve also assembled an exciting exploration portfolio with dominant land positions in three of the most prolific nickel belts in the world: Kambalda; Ring of Fire; and Cape Smith, and we like the potential we see in reopening some of the mines currently in care and maintenance in Widgiemooltha.”
In Giacovazzi’s summary, Wyloo is positioning itself as the producer of “the cleanest high grade nickel sulphide” in tier-1 jurisdictions, a comparison against Norilsk Nickel, the largest nickel sulphide producer globally and a company with deep links to the Russian State.
Nickel from nickel sulphides, sometimes referred to as ‘class 1 nickel’, is the preferred source of material for nickel that goes into electric vehicle batteries, where a cathode consisting of nickel, cobalt and manganese is used in high-end, long range passenger cars.
While the commodity threatened a breakout last year, hitting US$100,000/t briefly during a nixed short squeeze last March before closing the year around US$30,000/t, it has fallen precipitously this year.
Linked to weaknesses in the Chinese economy, where EV sales growth rates have not been enough to match supply growth in lithium and nickel (mostly from Indonesia), prices fell 1.3% to US$18,877/t overnight.
LME nickel stocks have increased almost 12% over the past month but at a touch over 41,000t remain way below the five-year highs of ~260,000t in mid-2021.
But the focus is longer term for companies like Wyloo, who are banking on the growth of the industry and EV supply chains outside China to propel long-term demand for battery metals.
In a hint that the miner could be looking at further growth, especially as it works toward studies later this decade at its Ring of Fire assets in Canada, where it hopes to have the Eagles Nest deposit open around 2030, a number of new executives have been pulled into the C-Suite.
The former GM of underground ops at Rio Tinto’s Oyu Tolgoi copper-gold mine in Mongolia Steve Price is now Wyloo’s asset president of Kambalda, while former Glencore exec Sylvain Goyette will lead its Canadian projects.
General manager of finance Nanette Trask has become the group’s CFO, while former Macquarie investment banker Joel Turco has been appointed as Wyloo’s chief development officer having previously led the expeditions to poach Noront and Mincor.