Mining industry yet to fathom scale of battery raw material challenges

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The TSX- and ASX-listed company owns the construction-ready Sunrise nickel/cobalt/scandium project in New South Wales, Australia, and will require just under $2-billion to bring the project to fruition.

Nickel and cobalt, in particular, face substantial raw material challenges, at a time when EV sales growth is expected to drive unprecedented demand for these metals.

“The transition to cleaner and more efficient forms of energy is inexorable. It always has been. What is rarely understood is the profound impact these transitions have on supply chains and raw materials,” says Friedland.

“We are sitting at the foot of an enormous wave that is gathering momentum.”

Citing industry forecaster Benchmark Minerals, he states that global battery demand will rise from 166 GWh in 2020, to almost 800 GWh by 2025, requiring nickel consumption in batteries to grow from 140 000 t in 2020 to 570 000 t in 2025.

“In renewable energy, the global mining industry has yet to fathom the scale of the challenge it faces. And, at least for now, it fails to comprehend the strategic significance of assets, like Sunrise, that are critical to enabling these new energy technologies,” says Friedland.

Clean TeQ, which wrote down the book value of its Sunrise project during the 2020 financial year, has confirmed its commitment to the project and says that it continues to be in discussions with the automotive industry.

CEO Sam Riggall stresses that the company is prepared to be patient and to wait for market conditions to improve.

“We have been extremely focused the past few years, completing a comprehensive programme of test work and studies, obtaining key project approvals and securing the resource. The result is a construction-ready, multi-decade asset producing some of the lowest cost nickel and cobalt units in the industry, designed to support well over one-million electric cars per year.”

Preliminary study results have confirmed the long-life, low cost of the Sunrise project, and Clean TeQ will announce a final project execution at the end of September.

The current cost estimate for Sunrise is $1.99-billion, which is one-third more than the 2018 definitive feasibility study. The mine will produce an average of 18 391 t/y of nickel metal and 3 171 t/y of cobalt metal, at a C1 operating cost before by-products of $4.76/lb nickel over 25 years.

“Sunrise is a template for how you build the mine of the future for emerging, technology-driven markets. If a company like Tesla can clearly articulate its concerns – ‘please mine more environmentally-friendly nickel’ - it’s now for the mining industry to determine whether it can deliver a solution,” states Friedland.