Gold still has its charms, so too do iron ore and lithium, but the 30th Diggers and Dealers chatathon in Kalgoorlie this week has seen two golden oldies reclaim top spots.
Yes, nickel and copper are now the ‘hot’ metals, with the PGE group of precious metals (such as platinum and palladium) a fast-finishing contender.
Gold, then nickel (remember the Poseidon boom in the late 1960’s) have drive much of the interest in mining in WA down the years, helped by oil and gas (LNG) on the northwest shelf and near Perth, diamonds at one stage (Ellendale), alumina, especially iron ore and the new contenders like lithium.
But after years of being ignored or sidelined, nickel and copper are back centre stage as two key metals in the renewables (wind farms, vehicles, batteries etc) boom.
Now everyone wants to talk about – led by BHP, the company that couldn’t sell its troubled nickel business back in 2015, but now is doing deals with the likes of electric vehicle and battery maker, Tesla.
Yesterday saw BHP’s outgoing head of its nickel business go the full ‘gush’ on the metal, describing 2020 as an “inflection point” for the rapidly approaching electric vehicle revolution.
He also reveals plans to expand production at one of the company’s major supply mines in WA at Mount Keith by up to 50% over the next couple of years to 15 million tonnes a year ( BHP also buys concentrates from smaller companies such as Minco).
Last month BHP and Tesla signed a nickel supply deal – an announcement that helped turn BHP from a miner with a minor nickel business into a miner with a major role in renewables through its nickel and booming copper business.
BHP Nickel West’s outgoing president, Eddy Haegel, said the electric vehicle era was dawning ahead of expectations as world governments unleash “green” post-pandemic stimulus programs targeting transport electrification and set hard deadlines to phase out internal combustion-engine cars.
Car makers were also increasingly expanding their electric vehicle offerings, bringing a range of new battery cars to market in 2020 (Share Cafe readers will have picked that up from two major articles in the past couple of months).
“In light of this … by 2030, we expect that a quarter of all sales will be electric vehicles,” Mr Haegel told the Diggers and Dealers conference yesterday.
“Compared to two years ago, we have upgraded our expectations significantly.”
Nickel and copper are also part of the way BHP has been cleaning up its business mix and profile by heading deeper into renewables, getting out of thermal coal, examining the future ownership of petroleum and boosting its exposure to so-called “future-facing” commodities including copper and nickel.
That’s why it has made a potentially company altering $A351 million all cash offer for Noront Resources, a Canadian miner whose major asset is its high-grade Eagle’s Nest nickel, copper, platinum and palladium deposit and chromite deposits (including Blackbird, Black Thor, and Big Daddy), in the James Bay Lowlands of northern Ontario in a region nicknamed district the ‘Ring of Fire.’
BHP also has been working to expand its Nickel West unit after reversing earlier plans to sell off the assets, which had been deemed “non-core” to its portfolio several years ago.
Mr Haegel said BHP’s nickel division now sold 85% of its output to the electric vehicle market rather than the traditional destination, the stainless-steel industry (much of which is based in china).
He said the miner expected this to be 90% within a year. “Our transition from a stainless-steel supplier, to a supplier of nickel metal to the battery industry, is all but complete,” he said.
He also outlined plans BHP has to expand production by more than 40% at its large low grade Mount Keith nickel sulphide mine in Western Australia, with a new semi-autogenous grinding mill, new flotation circuits and two new huge excavators.
“Nickel West’s future is very positive – and the opportunity to grow is real, as demand for future facing commodities like nickel is likely to get stronger,” Haegel said,
Haegel last spoke at the forum in 2017, when he said BHP would need to transition from stainless steel to nickel and laid out an expansion of the business, additional investment and a commitment to hold the business and not sell.
“We discovered that unlike stainless steel, Nickel West was remarkably well positioned to support the emerging battery sector,” Haegel said on Tuesday.
“We discovered that nickel is the most important metal to produce high-intensity batteries for electric cars and that we are one of the leading nickel powder producers – a product that remains one of the lowest cost pathways to producing nickel sulphate.”
He said that to facilitate the transition and consolidate its place as one of the world’s most sustainable nickel producers, the Mount Keith mine is expanding to a 15 million tonne a year operation from around 11 million tonnes.
“The capacity of the concentrator will rise from 10.5 million tonnes a year, to 12 million, and eventually 15 million tonnes a year,” Hagel said.
BHP shares finished the session around $52.87, down 1.5%.
