As social conversations surround the future of mining, with focus on climate change, green batteries, electric vehicles and decarbonising operations, nickel is making a comeback.
China is a world leader in adopting electric vehicles (EVs) powered by lithium ion batteries, with the government’s subsidies a massive incentive for people looking to purchase an EV.
Although Australia is lagging behind nations such as China when it comes to adopting EVs, the move towards greener cars and power is in motion.
As IGO chief executive officer Peter Bradford highlights in a Melbourne Mining Club speech, the decision to prioritise greener everyday solutions is something the company wants to “practice what it preaches”, including Bradford himself being a leader.
“We want to be a smarter, kinder and more innovative company,” Bradford explains.
“We want to be globally relevant and make quality products that our customers desire. We want to be vertically integrated and proactively green.
“We believe in a green energy future and by delivering the metals for new age batteries, we are making it happen.”
Bradford has started his own personal journey to contribute to a greener future by adding a Tesla S to his beloved car collection, which he fuels from the solar panels on his roof.
“That’s me making a difference, but it’s not me alone; there’s millions of people across the globe that want to make a difference to clean up the oceans and clean up the air,” he says.
“This makes for a perfect storm for nickel.”
Bradford believes there is going to be an explosion in EV demand brought about by consumer choices, with governments also helping to drive this evolving market through incentives such as those in China and the promotion of clean energy solutions.
He also notes the difference in performance of EVs by using better quality batteries, further drawing people to nickel-powered batteries.
With the Nova nickel-copper-cobalt mine in Western Australia’s Fraser Range, IGO is equipped to capitalise on this growing demand.
IGO has doubled its exploration budget over the past three to four years, with 60 per cent of the funding focussed on greenfield sites, identifying hundreds of targets within the region.
“We have a high conviction that there’s more Novas to be found,” Bradford says. “There is a belt that we think is prospective for Nova style discoveries that extends over a strike of some 420 kilometres.
“That’s a huge distance and if you’ve been out there and seen the gold mine after gold mine and nickel mine after nickel mine, you’ll realise the sort of concentration that could be achieved.”
It isn’t just what IGO is mining that is pushing the company towards a greener future, it is also the way it powers the Nova operation with a solar farm, which provides 15 per cent of overall power requirements to the site.
This reduces Nova’s carbon footprint by 6500 tonnes annually and has inspired IGO to turn to other means of lowering its impact.
“IGO is looking at the potential to change our diesel fire power station to natural gas, which would result in a further carbon footprint reduction of about 15,000 tonnes per year,” Bradford says.
“We have also started to look at EVs underground and we will do our first trials with electric light vehicles this year.”
Western Areas joins IGO as a Western Australian producer supplying nickel to support renewed global demand.
The Perth-based company signed an agreement in January with China’s largest nickel matte and cathode producer, Jinchuan, to supply the mineral from the Forrestania mine.
Western Areas chief executive officer and managing director Daniel Lougher is confident Australian nickel has a promising future, not just in batteries but also in other areas.
“In terms of volumes, batteries make up about 6 per cent of the world’s nickel production,” Lougher tells Australian Mining. “The other side of nickel is its usage in stainless steel, which makes up about 70 per cent.”
According to Lougher, stainless steel will continue to be the main product that Australian nickel is an ingredient for because of its non-corrosive properties.
As well as being used in conventional areas such as construction, there is further growth on the horizon for stainless steel within the renewables sector – to build the structures required for alternative energy sources such as wind power.
“When you start thinking about marine usage, such as for tidal energy or wind energy, all of these require big turbines,” Lougher explains.
“These have to be made out of anticorrosive material, because seawater is extremely corrosive.”
Although stainless steel remains the key market for Australian nickel, companies such as Western Areas are still keeping a close eye on EV demand and keenly anticipating its ramp up.
Like IGO, Western Areas believes the ramp up of nickel mining in Australia will result in cleaner mining, which in the long run will also be more economic, despite the upfront costs.
“We’ll have significantly less diesel trucks underground, which will obviously improve ventilation and require less cleaning,” Lougher says.
“That will reduce the power that’s needed and provide cleaner air for mine workers.”
Western Areas is also upping its exploration expenditure, spending around $15 million on greenfield and brownfield exploration annually.
“We are already picking up quite a lot of nickel,” Lougher says. “It may be in the lower grade, but the world grade is only slightly below 1 per cent.
“We’ve got two of the best belts in Australia at Cosmos and Forrestania in terms of grades and past production, and one of the reasons that attracted us to buying Cosmos (in 2015) was the large underexplored areas of belt.”
One of Western Areas’ exciting nickel assets is the Mt Alexander joint venture with junior company St George Mining, in which Western Areas holds a 25 per cent non-contributing interest.
St George not only has highly prospective nickel, copper and platinum group metals opportunities within its portfolio, but also the advantage of shallow deposits, which are cheaper and easier to mine, according to company chairman John Prineas.
He says the inevitable boom in demand for EV battery metals will change the structure of the normal commodity cycle.
“There’s all new demand coming through for new, higher grade battery grade nickel,” Prineas says.
“This is just the normal cycle of the commodity (but) the EV revolution is having a structural change to the whole nickel market and will change the cycle.”
Prineas compares nickel’s resurgence to that of iron ore, which in the past was not an attractive investment proposal due to low prices until the Chinese construction boom emerged and prices shot up.
He also recognises nickel’s role in stainless steel, noting the 5 per cent increase in demand for the metal from manufacturers of steel during the past 20 years.
“That is still progressively going up but the real exponential growth will be from the electric vehicle and new energy storage demand,” Prineas says.
With governments worldwide following China’s lead and bringing in laws mandating the use of EVs, such as the United Kingdom passing a motion that all vehicles must be electric or hybrid by 2045, Prineas is also confident about nickel’s future.
“There is no substitute for nickel in these batteries,” he concludes. “It takes a while for new technologies to gain market share momentum, but we think the tipping point is coming close.”
This article also appears in the April edition of Australian Mining.