A nickel renaissance 

It is 50 years since Western Australian nickel grabbed the world’s attention as a burgeoning commodity, and now new industries are placing it back on the global stage. 

When Ken Shirley, a prospector with Poseidon Limited, discovered the Mt Windarra nickel deposit in 1969, shares in the company catapulted from $1.85 to an incredible $280 dollars over five months. 

With nickel in high demand and low supply worldwide, small fortunes were made on the discovery, but when the price of the commodity started to fall shortly thereafter, profits from the Mt Windarra mine weren’t enough to keep Poseidon afloat and the company was delisted from the stock exchange in 1976. 

Those involved in the current-day nickel industry are all too familiar with these kinds of ups and downs in a historically volatile market. 

A number of nickel mines ceased operations in the past decade because of a persistently low commodity price, and WA’s largest nickel player BHP Nickel West was put up for sale. 

But with values now the highest they have been since 2014, stockpiles low and demand predicted to grow significantly, momentum is building around a nickel revival. 

One of a slew of commodities enjoying growth on the back of battery technologies and uptake of electric vehicles (EVs), new avenues are opening up for nickel beyond its traditional use as a critical ingredient in stainless steel production. 

Consultancy Roskill forecast nickel use in batteries would grow from accounting for around three to four per cent of demand to as much as 15 to 20 per cent of the market by 2028. 

This is good news for nickel sulphide producers, with this typically deeply buried form of the commodity the preferred type amongst battery makers compared to the nickel laterites used to make nickel pig iron. 

According to BHP Nickel West, a typical electric battery needs 11kg of lithium, 9kg of cobalt and a whopping 70kg of nickel – prompting it and other nickel sulphide producers in WA to consider their options. 

The same WA nickel mines which went into care and maintenance just a few years ago are now being brought back online as companies scramble to make hay while the sun shines. 

Canadian miner First Quantum Minerals’ Ravensthorpe nickel mine is slated for a return to production in early 2020, while Panoramic Resources shipped its first load of nickel concentrate from Wyndham port in February after announcing in July last year that mining and processing would recommence at its Savannah nickel sulphide project. 

Speaking on the sidelines of Diggers & Dealers Mining Forum last month, Panoramic Resources Managing Director Peter Harold said the nickel market was “interestingly poised”, with stockpiles continuing to go down and demand for EVs set to climb. 

“I can’t see enough nickel in the supply chain at the moment so it means more has to come on,” he said. “The nickel price has held up really well considering the turmoil in world markets as a result of the US-China trade war. 

“EV demand is significant and you are seeing manufacturers start ramping up production. We anticipated there would be strong demand for nickel outside of the stainless-steel market.” 

Panoramic plans on ramping up to full production in the first half of next year. 

Mincor Resources is another major player getting back in the game, with the company pursuing an integrated mine restart plan that includes its Cassini, Durkin North and Long deposits. 

Mincor announced in March it had signed a long-term off-take agreement to process up to 600,000 tonnes a year of nickel sulphide at BHP Nickel West’s Kambalda Nickel Concentrator. 

In 2017, BHP Nickel West Asset President Eddy Haegel announced after half a century of supplying to the stainless-steel market, the company would gear its operations towards battery manufacturers. 

This was seen by some industry commentators as a ploy to make the business, which had been up for sale since 2014, more attractive to potential buyers, though the repositioning ultimately proved pivotal in BHP’s decision earlier this year to retain the asset. 

Addressing delegates at Diggers & Dealers, Mr Haegel unveiled a strategy to take full advantage of the emerging battery revolution, detailing extensive exploration investments and plans to de-bottleneck Nickel West’s suite of processing facilities. 

Since changing tack three years ago, Mr Haegel said Nickel West now sold 75 per cent of its nickel product to battery producers in Japan, South Korea and China in the form of nickel powder and nickel briquettes, with BHP expecting battery demand to impact the market in mid to late 2020. 

“We will not wait for that day to arrive, we are actively developing options to position ourselves for this once-in-a-generation opportunity,” he said. 

The company will next year begin commissioning its 100,000-tonnes-per-annum nickel sulphate plant at Kwinana. 

 

Image: BHP Nickel-West, supplied by BHP. 

latest news

BHP sets clock on Canadian potash project

BHP says it will make a final investment decision on its long-delayed $US17 billion ($25 billion) Jansen potash project in Canada by early 2021.

Read more

Lithium mine to boost State coffers

Talison Lithium will inject $4 billion a year into the State’s economy once the newly-opened processing plant in Greenbushes is running at full capacity.

Read more

Havilah Resources goes to shareholders for capital

Havilah Resources has announced a $5.46 million capital raising just weeks after knocking back a $100 million investment from GFG Alliance.

Read more

Confidence building for a new nickel mine in WA

The owner of a raft of new nickel sulphide discoveries in central Western Australia has said results to date are sufficient to warrant a level of confidence that the ore body will emerge as a new Australian nickel mine.

Read more

Perth’s Talga boosts Swedish graphite project

Sweden-based Talga will move ahead with economic studies for its new Niska discovery in Sweden having just announced a maiden resource for the part of its wider Vittangi project.

Read more

Australia's nickel sector warned of challenges

Nickel Institute Brisbane-based Director, Market Development Richard Matheson has called on Australia’s nickel sector to be more vigilant of the emerging market challenges faced by the metal.

Read more

 

industry insight

The real impact of artisanal mining

With an estimated 40 million people engaged in artisanal and small-scale mining (ASM) globally,

...
Products and Technology

Revolutionising conveyor health monitoring 

Taking real-time data and using it to enhance asset management, improve reliability and deliver ground-breaking predictive capabilities, Aura IQ is

...
People and Projects

A nickel renaissance 

It is 50 years since Western Australian nickel grabbed the world’s attention as a burgeoning commodity, and now new industries are placing it back on the global stage. 

Occupational Health and Safety

Improving the balance

Operating at the top of an industry recognised for continually pushing the envelope when it comes to export figures, it is unsurprising Rio Tinto would look to improve

...

interview

Clear direction in a fickle business

In life, success can be measured in myriad ways, and it is no different in the resources sector where navigating change...

Read more