The shift to high nickel batteries is happening right now

Meaningful efforts to increase nickel content in batteries will support an anticipated +560 per cent increase in battery related nickel demand over the next five years.

South Korean battery materials maker Posco is now producing cathodes with greater nickel content to meet demand for greater energy density and longer driving range in the next generation of EVs.

A recently completed 25,000-tonne-per-year plant expansion will mass produce cathodes with 65 per cent nickel content, Posco says.

The company ultimately wants to produce new cathode materials that consist of more than 90 per cent nickel.

It’s not the only one. Fellow South Korean battery maker Samsung says that nickel will make up more than 80 per cent of the cathode materials in its fifth-generation EV batteries when commercial production begins in early 2021.

The strategy reflects a push by EV battery makers to increase efficiency and extend driving ranges to help win more contracts from carmakers, according to Argus.

“[Samsung’s] energy density will be increased by more than 20 per cent over current models and driving ranges will reach about 600km,” Argus reports.

“Changing cathode materials recipes also will have a big impact on which metals are most affected by an EV demand boom, as increased nickel content will come at the expense of cobalt.”

The pandemic has exacerbated an old problem

Although the battery sector share of nickel demand is much smaller than other metals, getting the quantity of nickel that EVs will need, called tier 1 nickel, by the mid-2020s will be a challenge.

That’s because the low nickel price has hindered project development, “and with lead times often up to 10 years, investment needs to happen now.”

Wood Mackenzie said that last year. Benchmark Minerals forecasts nickel demand from lithium-ion batteries to grow 567 per cent on 2019 levels by 2025 which is why, despite COVID-19, nickel deals and developments have continued to (tentatively) flow.

This week, Volkswagen confirmed the long-rumoured acquisition of a 26 per cent stake in Chinese battery producer Guoxuan High-Tech.

Guoxuan is planning a new 16 gigawatt-hour (GWh) lithium-ion battery megafactory plus a 30,000-tonne-per-year NCM (nickel-cobalt-manganese) cathode plant, “to produce high nickel NCM cells for VW’s expanding EV business in China”, Benchmark Mineral Intelligence says.

In early June, Chinese company Huayou announced it was looking to expand nickel and cobalt sulphate production in Indonesia.

“Once completed, Huayou estimates that nickel consumption from these projects to total over 100,000tpa, and whilst this is an in-house projection it represents a statement of intent from a key refiner in the supply chain,” Benchmark says.

Meanwhile, New Century Resources (ASX:NCZ) has entered exclusive talks with Brazilian mining company Vale to acquire a 95 per cent stake in the troubled Goro HPAL nickel-cobalt operation in New Caledonia.

Production at Goro is currently undergoing a process of ‘flowsheet simplification’, Benchmark says, as production is switched solely to Mixed Hydroxide Precipitate (MHP), which typically contains about more than 37 per cent nickel.

“New Century Resources confirmed that if the proposed acquisition is completed, this process will be continued as the company looks to capitalise on the growing demand for nickel intermediates from the EV supply chain,” Benchmark says.

“MHP is becoming an increasingly popular feedstock for nickel sulphate production, due to its favourable conversion costs and the forecasted 312 per cent growth in non- integrated supply by 2025.”

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