Tier 1 Discovery, page-17

Another area of focus is nickel, where BHP still appears to be on board with plans to develop the 35,000tpa West Musgrave mine in WA’s remote Ngaanyatjarra Lands despite falling prices in 2023.

Nickel is now trading in the low US$18,000/t range as ramping supplies from Indonesia have outpaced demand from the electric vehicle sector.

Indonesian President Joko Widodo is currently lobbying for a free trade agreement with the US, which would make the country’s nickel inflation reduction act compliant.

A terrifying prospect for Australian nickel sulphide producers, whose ability to help OEMs access those tax credits is a selling point to investors on why they stay in the volatile battery metal.

Coming a day after Nickel Industries (ASX:NIC) MD Justin Werner said western EV makers were realising they would need Indonesian nickel, Mackenzie and Henry said their Nickel West division would deliver battery nickel with lower carbon intensity than Indonesian nickel laterites.

“Our ambition there is to continue to grow our nickel position,” Mackenzie said.

“Now in the case of Indonesia, it does have significant nickel reserves and we’ve seen a big rise of late in nickel production out of Indonesia, but the Indonesian reserves are typically laterite ore rather than what we have, which is sulphide ore in Western Australia, which is used for batteries.

“So to convert Indonesian ores into battery-grade materials requires significantly more processing and energy, and as a result of that has significantly greater carbon footprint.”

Henry said he believed sulphide nickel would sit at the low end of the cost curve and would be the most sustainable nickel produced for EVs.