Independence Group’s Nova mine. Image: IGO.

 

 

BY ELIZABETH FABRI

 

ASK any analyst for their best performing commodities of the year, and nickel will be on the list. The base metal is enjoying a stellar year – its price has increased 75 per cent in the last 12 months – as it reinvents itself as a commodity of the future.

 

A new cohort of nickel juniors are advancing exploration in Australia to capitalise on rising prices.

At the end of June, nickel was hovering around the $US15,000 per tonne mark; a sizable increase from the $US8931 it was fetching a year prior.

And if forecasts are anything to go by, demand for the metal is expected to increase by a further 50 per cent to 3 million metric tonnes by 2030, in line with rising demand for battery metals in electric vehicles.

According to Deloitte Client and Markets partner Tim Richards, the nickel industry was morphing into two clear supply chains; one supplying the stainless steel sector, and the other to be used in super alloys and lithium batteries.

 

“The International Energy Agency forecasts that the number of electric vehicles is expected to reach 125 million by 2030, compared to just 3.1 million in 2017,” Mr Richards said.

 

And lithium batteries used in Tesla electric vehicles comprise 85 per cent nickel.  Global market fundamentals were clearly looking strong, but where does Australia’s supply fit in?

 

Australian producers

 

In the last 12 months, there has been some big changes across the Australian nickel landscape.

Independence Group’s (IGO) Nova hasn’t even been in production for a year, but already IGO is deep into studies aimed at using the asset as a hub for downstream processing of nickel sulphate for the burgeoning battery market.

IGO, with the unique metals mix in its Nova concentrate and growing interest from the EV battery manufacturers for reliable sources of nickel and cobalt sulphate, completed a scoping study last year.

In May, IGO flagged its new focus on battery metals – including nickel – selling its Jaguar zinc-copper operation for $73.2m.

BHP Nickel West has also been busy increasing its nickel output by 10 per cent in the March quarter compared to 2017. The diversified mining giant is expanding its business as a supplier of battery minerals at its nickel refinery in WA, planning to start producing nickel sulphate in 2019.

But, in recent weeks media has speculated BHP could be looking to take advantage of the strong market by placing Nickel West on the market once again; a move that will enable it to return its focus to its key commodities, such as iron ore.

Meanwhile, Western Areas – which operates  the Flying Fox and Spotted Quoll nickel mines in WA – has green lit a $32 million early works program for its undeveloped Odysseus project at Cosmos, WA, to fast track the project to become its third producing mine.

“We have taken this decision to commence early works, prior to the release of the DFS, due to our confidence in the overall project and just as importantly, our confidence in the nickel sulphide market,” Western Areas managing director Dan Lougher said.

“The demand for Class 1 nickel sulphides in the battery and electric vehicle (EV) market is forecast to grow substantially over coming years.

“We believe that Odysseus is one of a very few select nickel sulphide projects that will be coming into production in a timeframe that will enable it to deliver into that growing demand profile, which we are seeing validated by the strong inbound interest from potential offtake parties and project investors.”

 

 

 A resource expansion drill program has begun at Sconi. Image: Australian Mines.

 

Juniors to Watch

 

Mincor Resources

Gold miner Mincor Resources which owns a portfolio of projects in the Kambalda region, with 99,200t of contained nickel in resource and 28,200t of nickel in reserves.

Detailed feasibility studies have been completed at Durkin North and Miitel/Burnett, and the company also had a significant nickel discovery at its Cassini project.

In a May presentation, the company said it was positioning itself “for a new nickel era” with a pathway to build high-grade nickel sulphide reserves.

 

Panoramic Resources

Panoramic’s Lanfranchi nickel project near Kambalda remains on care and maintenance, but the company was now completing pre-production activities at its Savannah project in the Kimberley, WA.

Panoramic Resources said an updated feasibility study completed last October, confirmed a “financially robust project with a long mine life, modest pre-production capital and competitive operating cash costs”.

The mine was expected to have a life of 8.3 years, with annual production of 10,800t nickel, 6100t copper, and 800t cobalt.

 

Poseidon Nickel

Poseidon Nickel was another Goldfields hopeful.

The junior owns six independent nickel sulphide mines and two concentrators, including the established high-grade Silver Swan mine, Black Swan and Windarra project.

The company’s vision is to redevelop its existing mines, recommission processing plants and restart production.

Poseidon has already started preparation for the restart of Silver Swan, with all regulatory approvals secured.

 

Ardea Resources

In June, Ardea Resources announced it had engaged engineering firm Simulus to undertake a pilot plant trial for its flagship Goongarrie nickel cobalt project under development near Kalgoorlie.

Ardea chair Katina Law said the research and development program was an important step in the development of Goongarrie, and would produce nickel sulphate under operating conditions that mimicked a commercial operation.

Once developed, the project is expected to have a 25 year mine life and produce 41,500tpa of nickel sulphate.

 

Australian Mines

Australian Mines’ is advancing its flagship Sconi project in Greenvale, QLD.

The project, while not yet developed, has already secured a binding offtake agreement with Korean industrial conglomerate SK Innovation for the sale and purchase of up to 60,000t of nickel sulphate per year, and 12,000t cobalt per year for an initial contract period of seven years.

The company was now in the process of securing project financing, and all going well could hit the start button on construction in February 2019.

 

 

Advertisement