Electric cars likely to increase global nickel demand
Published on Fri, 03 Nov 2017
Gadgets Now reported that battery makers are increasingly turning to nickel to help power growing global electric car sales, but only half of the world's producers of the metal are likely to benefit. According to analysts at UBS, the battery boom promises a new and growing market for miners producing high-grade nickel products. However, half the world's supply of the metal, comprised of so-called ferronickel and nickel pig iron grades, is unsuitable for battery production.
Some of the biggest producers of the higher-grade ores, including BHP Norilsk Nickel, Vale and Sumitomo Corp, are moving quickly to take advantage and seal long-term supply deals with battery producers.
Smaller producers with ores suitable for batteries, such as Australia's Independence Group and Western Areas also stand to win.
These producers are building plants to convert the metal into a powder-like sulfate that is particularly suited for use in batteries. Sulfate nickel regularly fetches a price premium over London Metal Exchange-traded nickel.
Mr Dan Lougher, chief executive of Western Areas said that "Not everyone will be a winner.” He added that "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."
Among those losing out would be lower-grade nickel mines like Cerro Matoso in Columbia, owned by South32 Ltd and Glencore's Koniambo in New Caledonia, as well as Anglo American's mines in Brazil producing ferronickel.
Mr Peter Bradford, chief executive of Independence Group Ltd, which is aiming to produce around 25,0000 tonnes of high-purity nickel this year from a new mine said that "The market dynamics will change in the coming years as a result of electric vehicles.” He added that "Battery growth is going to disrupt the market.”
The big companies are already moving.
Norilsk, the world's biggest nickel miner, in June announced a tie-up with the German battery maker BASF.
Within a few weeks, BHP unveiled plans to retool its Nickel West division to start shipping nickel to battery manufacturers beginning in April 2019.
Mr Eduard Haegel, division chief of Nickel West, expects demand for electric vehicle batteries to account for about 90 percent of the division's annual output of 100,000 tonnes within the next six years.
Meanwhile, Vale is looking for a partner in its loss-making New Caledonia nickel complex. It has been in talks with the Chinese battery maker GEM Co, the Financial Times reported.
Source : Gadgets Now