Today is the day, page-95

Something to get everybody relax a bit while we are waiting for the news:
https://www.theaustralian.com.au/business/mining-energy/shortage-sparks-nickel-sulfate-scramble/news-story/d3378b46235b501a43a5717b58ba5c50

Shortage sparks nickel sulfate scramble

Global producers of electric cars have big ambitions and a bigger problem: supplies of a key material are running short.

Nickel sulfate is a brilliantly coloured crystalline substance used in electric-vehicle batteries. The ore most commonly used to produce it is mined in only a handful of places -- and they include some of the most politically or operationally challenging, such as Russia or Canada’s frozen Northeast.

Nickel sulfate accounts for just a fraction of global nickel sales; about 70 per cent of nickel is used in stainless steel. But automakers will launch more than 200 new plug-in electric vehicles through 2023, consulting firm AlixPartners estimates -- and that isn’t counting hybrids. UBS expects batteries in electric vehicles to account for 12 per cent of global nickel demand by then, up from 3 per cent in 2018.

And after years of low prices that stalled investment by global miners, nickel supply is falling short of demand. “There’s no new nickel in the pipeline,” said Angela Durrant, principal metals analyst at Wood Mackenzie, a UK-based consulting firm.

Batteries with a high nickel content are becoming more popular because of the metal’s stability under high temperatures and its resistance to overcharging, UBS said. Tesla has increased the nickel in its battery packs and reduced the cobalt -- achieving the highest energy density of any electric-vehicle battery, it says, meaning a longer driving range. It plans to eliminate cobalt entirely. At a conference in May that included miners and lawmakers, a Tesla manager spoke of the importance of continued investment in mining for battery metals.

Under the baking sun in the Australian Outback, workers digging nickel out of the red earth for BHP Group have reason to be thankful for the appetite of Europeans and, increasingly, Americans for electric vehicles.

BHP’s Nickel West operation was on the mining industry’s death row only four years ago. With stainless-steel makers turning to cheaper nickel sources elsewhere, such as Southeast Asia, executives debated its closure -- which could cause the direct loss of 2000 jobs. As recently as May, it was up for sale.

Now, Nickel West ranks among BHP’s priorities for new investment. Battery customers, a nonfactor as recently as 2015, now buy most of the operation’s production. BHP plans to start up one of the world’s largest nickel-sulfate plants next year, and has lined up buyers in Japan, South Korea and China.

“We have been on an extraordinary journey since January 2015,” said Eduard Haegel, BHP’s asset president overseeing Nickel West.

Betting on a demand boom is a tough business, especially for a niche commodity that isn’t easily priced or hedged. Today, trading on the London Metal Exchange is for nickel cathodes, pellets and briquettes only. Buyers typically pay a premium for battery-grade nickel sulfate, which makes pricing opaque.

The benchmark nickel price is historically volatile. It has surged roughly 70 per cent in 2019, to about $US18,000 a tonne, because of a ban on nickel-ore exports from Indonesia that will take effect earlier than traders had expected.

Some analysts are cautious after the last big nickel boom. Triggered by China’s industrialisation, it sent the price to $US50,000 a tonne in 2007 from roughly $US10,000 just a few years earlier. But a crash soon followed, after China’s steel producers figured out how to substitute a lower-grade product, known as nickel pig iron.

There is a risk a long-term surge fuelled by electric vehicles could again drive innovation and bring nickel down to earth. Still, many miners and analysts are sceptical on the options for swapping out nickel, at least for the next decade or so.

Meanwhile, costly new projects -- requiring nickel prices in the mid-$US20,000s to be profitable -- are likely to be needed to bridge the market gap, according to Roskill, a commodities consulting firm.

Already some mining companies are experimenting with new technologies to get ahead of the game. Independence Group has high hopes for the Nova nickel deposit, originally stumbled upon in 1979 by a prospector searching the Outback for wreckage of the US space station Skylab.

Independence is looking to produce nickel sulfate and other commodities, including cobalt, by a method that involves injecting oxygen into a reaction chamber to convert a finely ground nickel concentrate. The company began initial studies last year, but hasn’t moved to commercial production yet.

BHP, Independence and Australian rivals have scrambled, meanwhile, to secure rights to explore land they think could hold more high-grade nickel resources.

Roskill predicts some stainless-steel makers that today use premium material will switch to lower-grade nickel, which would free up some supplies. Still, it forecasts batteries accounting for roughly one-fifth of all nickel demand by 2030, with particularly rapid demand growth through the first half of the next decade.

Wall Street Journal