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EV’s will make nickel a once-in-a-generation investment opportunity, says BHP
More EVs and more nickel in each of them will drive nickel demand through the roof, says the head of BHP’s Nickel West arm
16th August 2019
Barry FitzGerald
More EVs and more nickel in each of them will drive nickel demand through the roof, says the head of BHP’s Nickel West arm. His forecast is great news for those juniors with large nickel deposits awaiting development, such as the Jaguar project just acquired by Centaurus from Brazilian giant Vale. Plus, Venturex’s $100m debt deal sets it up to become one of the few ASX-listed copper producers.
The display of oomph at last week’s Diggers & Dealers conference in Kalgoorlie was not restricted to the gold stocks.
The nickel stocks made sure of that, with none other than BHP leading the charge in a presentation by its Nickel West president, Eddy Haegel.
Nickel West is the formerly unloved BHP unit that has come into its own in response to what Haegel described as a once-in-a-generation opportunity presented by the gathering nickel-rich battery boom.
Haegel said that in addition to the rapid growth in electric vehicles sales, BHP expects nickel-in-vehicle demand to surge, driven by three factors.
The first is batteries are becoming bigger to improve vehicle range and performance. Next, nickel-based cathodes are taking market share from non-nickel cathodes because they’re “simply better”.
And finally, increasing nickel in battery chemistries increases energy density, delivering better performance and lower costs.
“It is important to understand that a 60kwh NMC811 battery needs 9kg of cobalt, 11kg of lithium and a massive 70kg of nickel,” Haegel said.
While stainless steel still accounts for about 70% of nickel consumption, batteries is the fast growing subset, to the point where EV’s alone could account for all of the current production in the late 2020s.
Haegel sounded a note of caution about the here and now. While BHP thinks there is going to be a significant increase in global nickel demand, it is a case of not just yet.
“We do not expect to see a meaningful impact on the nickel market from batteries until the mid – late 2020s. Only then, do we expect to see serious industry investment by Class 1 nickel producers,’’ Haegel said.
“However, we will not rest waiting for that day to arrive. We are actively developing options to position ourselves for this once-in-a-generation opportunity.’’
It is against that backdrop that the nickel price has been a strong performer of late. The current price of $US7.17/lb compares with the 2018 (calendar) average of $US5.95/lb, and the 2017 average $US4.72/lb.
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