- Write by:
-
Tuesday, October 13, 2020 - 10:48:09 AM
-
293 Visit
-
Print
Mining News Pro - Battery manufacturers and automakers are increasingly looking to invest in nickel projects to secure supply and the resurgent West Australian sector stands to benefit, according to Mincor Resources managing director David Southam.
Talks between miner BHP and electric vehicle manufacturer Tesla over a potential nickel deal were last week reported by Bloomberg.
Both parties declined to comment but it hasn’t stopped the speculation being a key point of discussion at the annual Diggers and Dealers mining conference in Kalgoorlie.
West Australian Premier Mark McGowan even referenced the potential talks in his keynote address and suggested manufacturers would increasingly look to secure supplies of battery materials from the state.
“This won’t be a temporary trend, this is going be a fundamental shift in the way business is done,” McGowan said.
Southam, whose company plans to supply nickel to BHP’s Kambalda concentrator, said while he didn’t know whether talks were occurring between Tesla and BHP, “I do know that Tesla have looked to go further upstream”.
“WA is a tier-one, reliable, ethical investment jurisdiction… given there are challenges with production coming from other areas that don’t have those attributes, and vehicle companies having a sharp focus on ethical sourcing, it puts WA in the spotlight,” he said.
“We are the largest producers of nickel sulphide in the world so it makes sense battery producers and car makers are going further upstream to secure those supplies.
“Western Australia has a lot of the ingredients to make precursors for batteries – nickel, cobalt, lithium – so it is a good hunting ground and there are not many other jurisdictions that can compete in that way.”
Southam said the 2018 lithium offtake agreement between Tesla and Kidman Resources, of which Southam was a director of until it was acquired by Wesfarmers in 2019, demonstrated Tesla and other automakers were prepared to invest upstream.
After a sustained downturn in prices all but wiped out nickel mining in Kambalda in Western Australia, Mincor is again firing up in the historic region.
The home of the 1969 Poseidon nickel boom, the productive Kambalda province has produced more than 51 million tonnes of nickel ore since WMC Resources made the first discovery in the district in 1966.
It has run dry in recent years after several local miners, including Mincor, shut their projects in 2015 and 2016 after the price hit decade-lows.
Mincor is leading a revival of the region, with plans underway to restart production and develop new projects.
Last month, the company secured $55 million in project debt finance and raised $60 million equity to fuel its plans for an initial five-year operation at its Kambalda nickel operations.
Following expected first nickel-in-concentrate production in late 2021, the company is forecasting peak annual production of about 16,000 tonnes a year in 2023 and 2024.
Mincor’s moves are part of a broader nickel recovery in Western Australia. First Quantum has restarted the Ravensthorpe mine and Poseidon Nickel is mulling a restart of its Black Swan operation.
BHP is working to expand its Nickel West business in the region and target players in the battery sector ahead of an expected demand-driven uptick in prices for the base metal.
The commonwealth’s Department of Industry’s Resources and Energy September quarterly forecasts nickel prices will average US$13,100 ($18,177) a tonne in 2020, down 6 per cent on 2019 due to lower consumption and an oversupplied market in the wake of the COVID-19 pandemic.
Prices are forecast to recover to US$15,300 a tonne in 2022, fuelled by strong consumption growth anticipated for nickel for use in electric vehicle batteries.
“The more nickel that displaces cobalt and manganese, it improves the energy density and so you get higher mileage from the battery… the question is where is that nickel going to come from,” Southam said.
“Nickel sulphide is in high demand, is hard to find and is dwindling in supply. We are in the fortunate position where we have found some and I think we are going to find some more.”
Southam talked down prospects of consolidation in the tight-knit sector, despite several prominent players openly searching for growth opportunities.
Mid-tier base metals miner IGO, which has indicated its desire to increase its footprint in future metals, holds an 8 per cent stake in Mincor and billionaire Andrew Forrest’s private mining exploration and investments company Wyloo Metals holds a 15 per cent stake.
Wyloo Metals also has an 18 per cent stake in local nickel player Poseidon Nickel.
Short Link:
https://www.miningnews.ir/En/News/606078
A prefeasibility study for Predictive Discovery’s (ASX: PDI) Bankan gold project in Guinea gives it a net present value ...
The London Metal Exchange (LME) on Saturday banned from its system Russian metal produced on or after April 13 to comply ...
Iron ore futures prices drifted higher on Thursday as the latest soft data from top consumer China triggered renewed ...
French mining group Eramet said on Wednesday it had reached an agreement with the French government to continue its ...
Rio Tinto said on Wednesday it is teaming up with a global venture studio and start-up investor to back the development ...
Outflows from global physically backed gold exchange traded funds (ETFs) continued for a 10th month in March, but at a ...
Copper jumped to its highest intraday price since January 2023 as the bellwether industrial metal faces rising tighter ...
Australia’s Fortescue said on Monday it would form a joint venture with OCP Group to supply green hydrogen, ammonia and ...
BMO Bank quietly dropped its policy restricting lending to the coal industry in late 2023, helping it avoid being ...
No comments have been posted yet ...