The next decade will be ‘very good’ for nickel miners amid pivot to batteries
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Nickel miners are increasingly pivoting towards battery-grade nickel production for the coming electric vehicle (or “EV”) and stationary storage boom, delegates at the Nickel Conference 2018 in Perth heard on Tuesday.
Nickel is already the most significant metal in lithium-ion battery cathodes used in EVs.
A September forecast by researchers at Roskill suggested demand for nickel sulphate – essential to production of cathodes for lithium-ion batteries — may reach 800,000 tonnes to 1 million tonnes by 2030.
This represents almost half the size of today’s entire nickel market.
Michael Rodriguez, chief operating officer at emerging producer Poseidon Nickel (ASX:POS), said the volume of nickel used in stainless steel still dominated but the emerging battery market was growing rapidly.
“The [entire nickel] market is 2.2 million tonnes, roughly, of which over 70 per cent is still consumed in stainless steel,” he told Nickel Conference delegates in Perth.
“Having said that, we are clearly focussed on what is an emerging use for nickel [in batteries].”
And future batteries will use more nickel, not less, Mr Rodriguez said.
The next generation of high-nickel, low-cobalt 811 NCM batteries for EVs could significantly increase projected nickel demand – and supply could struggle to keep up.
“There’s a number of views on this, but what I can say is technology adoption always happens faster than we think it will,” he said.
“If you take a conservative view, 300,000 tonnes of nickel going into the battery industry in the next two years is certainly possible.
“By 2023, I think that penetration will be better than what we are forecasting.”
Nickel projects take five to seven years to bring into production.
There’s very few high quality, near-term projects to fill the projected supply gap, Mr Rodriguez said.
“The next 10 years should be very good for the nickel market.”
Major producers are adjusting for battery industry demand
In 2018 BHP’s (ASX:BHP) Nickel West business began transitioning into a supplier to the global battery industry, beginning Stage 1 construction of its 100,000 tonnes per annum nickel and cobalt sulphate plant in Kwinana.
“Very soon we expect to realise our goal of becoming a globally significant battery material producer,” Nickel West’s Karl Stokes told conference delegates.
“This will see us transition from a traditional mining house into a high-quality chemicals business.”
Preparation for Stage 2 approvals have already kicked off to increase production to 200,000 tonnes per annum.
Fellow producers Western Areas (ASX:WSA) and Independence Group (ASX:IGO) also spoke about the increasing importance of the battery market to their businesses.
Independence chief Peter Bradford said the company’s strategy had changed over the past 12 months as it looked toward making products for the renewable energy and energy storage industry.