Nickel will be the primary beneficiary of electric vehicle (EV) adoption in the context of other battery metals such as lithium and cobalt, supported by its dominant long-range capabilities. In addition, a wealth of nickel deposits will position Africa to benefit from an upward price trend in the coming years writes GERARD PIERRE.
THIS ARTICLE FIRST APPEARED IN AFRICA MINING REVIEW NUMBER 3, 2021
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These are the main findings of a recent report by Fitch Solutions which examines the opportunities and risks of nickel in the battery revolution. The basis for the report was based on a recent Africa mining review webinar titled, Nickel: the forgotten battery metal where Fitch Solutions, Carly Cassidy was a participant.
The webinar discussed an expected surge in demand for nickel due to accelerated growth in electric vehicle adoption and the opportunities for Africa to benefit from the battery boom. According to the report, when asked about the role that nickel currently plays in the electric vehicle and battery markets, most webinar participants expressed the opinion that nickel plays a “weak role as it could be replaced by other products as technology evolves ”. the perception of nickel as a “forgotten” battery metal.
“However, Fitch Solutions expects nickel to remain intrinsic to batteries, especially those in electric vehicles, due to its high energy density which gives it an unmatched advantage in terms of range and vehicle charging capacity. The demand for nickel is expected to be further strengthened as battery manufacturers continue to downplay the proportion of cobalt metal in batteries, ”added Cassidy.
In addition, Cassidy explained that Nickel’s dominant lineup capabilities will keep demand anchored in large automotive markets such as the United States and Canada, where the charging infrastructure will face long-term challenges in accommodating more dispersed populations. Additionally, automakers such as Tesla will use batteries with a high nickel content in commercial trucks and high-end models.
Webinar: Nickel: The Forgotten Metal Battery
Africa will benefit from the demand
As battery-grade nickel remains in deficit, the richness of Africa’s nickel deposits will position the country to benefit from an upward trend in prices in the years to come. According to the report, African nickel production will increase in the coming years, with South Africa and Tanzania benefiting the most.
Currently, most of the nickel mines in Africa are in Botswana, Zimbabwe and South Africa. In the latter two countries, nickel is most often mined as a by-product of PGMs. The boom in demand for nickel for batteries and the accompanying rise in prices have already started to renew interest in the sub-sector.
The development of the Kabanga nickel project in Tanzania indicates upside potential for future development of the untapped reserves present in the East African Nickel Belt (EANB). In January of this year, British mining company Kabanga Nickel signed an agreement to develop what is currently the world’s largest deposit of battery-grade nickel sulfide through a joint venture with the Tanzanian government. With four new projects, Tanzania leads the region in nickel development projects.
Meanwhile, a high amount of nickel sulfide and potential access to value-added processing will further support Africa’s ability to supply the battery industry. EANB’s nickel sulfide resource base gives the region a key advantage over Indonesia, the world’s largest producer of nickel today. Africa has significant nickel sulphide and laterite ore resources, while Indonesia lacks the former.
While laterite ores can also be converted to battery grade nickel, nickel sulfide can be much more easily processed by traditional mining methods followed by smelting and refining.
The ease of processing also means that nickel processing using African sulphide deposits would be less energy-intensive and therefore more sustainable, thus increasing the attractiveness of investments for ESG-conscious Western producers along the battery value chain. Indonesian laterite ores require energy-intensive processing such as High Pressure Acid Leaching (HPAL), which raises environmental concerns, especially with regard to its waste disposal methods.
Read: Fitch raises short-term metal price assumptions in 2021
South Africa can profit from the upward trend
The report further states that the start of production at Thakadu Battery Materials’ US $ 20 million nickel sulfate refinery in South Africa introduces Africa into value-added processing activities. Thakadu started production in March 2021 and aims to produce 16,000 tpa in 2021, then reach a steady state of 25,000 tpa, sourcing mainly from Sibanye-Stillwater operations.
Finally, the report says South Africa is also well positioned to provide battery-grade nickel downstream processing, enjoying a higher Mining Risk Reward Index (RRI) compared to riskier jurisdictions in the United States. region. In addition, South Africa’s strong potential for green hydrogen production could lead to a more sustainable nickel sulfide smelting process in the future.