First it was a deal to supply Tesla with battery grade nickel product, now BHP has reached a similar deal with a battery-making joint venture between Toyota Motors and Panasonic, thereby greatly expanding the Big Australian’s footprint in the rapidly growing electric vehicle (EV) business.
The collaboration with Japan’s Prime Planet Energy & Solutions (PPES) – which was formed by Toyota and Panasonic in April last year – follows July’s deal to supply Tesla with the key battery grade material, nickel sulphate from its Nickel West operations in WA
The nickel sulphate will come from the miner’s recently-opened Kwinana refinery, which is expected to produce 100,000 tonnes of material year when fully operational. That is enough premium product to make 700,000 EV batteries each year, according to Nickel West president Jessica Farrell.
The shares edged up 0.3% on Wednesday to $36.65 after a 1.1% drop on Tuesday.
BHP’s nickel sulphate will allow PPES to develop lower carbon batteries that will be supplied to EV manufacturers, including Toyota. The parties also intend to identify ways to implement standards for end-to-end raw materials traceability, ethical sourcing and human rights reporting, they said.
Toyota Australia and Nickel West say they will also collaborate on EV supply on the back of a successful trial in December of last year.
Nickel is a key component for electric vehicle (EV) cathodes, and the world’s no. 1 mining company expects demand for the metal from the batteries sector alone to increase by 500% over the next decade.
Nickel sulphate is a key battery chemical and has much higher margins than nickel metal (which is used to make stainless steel and associated alloys) because of fast growing demand from the battery sector.
This rising demand is why BHP has done deals with Tesla and now the Toyota/Panasonic JV. Panasonic has a long-standing battery JV with Tesla called the Gigafactory.
BHP says 50% of the electricity for the Nickel West refinery would come from the Merredin solar farm, with another solar power facility being built in the Kalgoorlie Goldfields to power mines and processing facilities there.
The agreement came only days after BHP said it had produced the first nickel sulphate crystals from its plant in Kwinana plant south of Perth
The facility will create 80 new direct jobs and support 400 new indirect jobs, along with the 200 construction jobs that were created during the construction phase.
Over half of the plant was fabricated in Western Australia using local skills and suppliers. This included the steel work, fibreglass leach vessels and stainless-steel tanks.
The plant consists of leaching tanks, purification technology, a crystalliser and dryer and an automated packaging system.
Nickel from BHP’s WA mines is processed at the Kalgoorlie nickel smelter, before it is transported to the Kwinana nickel refinery and refined into nickel metal (in the form of powder or briquettes).
Nickel powder is then processed through the new sulphate plant to make nickel sulphate. The nickel sulphate will be exported to global battery markets from Fremantle.
Nickel West operations include open cut and underground mining operations in Western Australia; concentrators at Mt Keith, Leinster and Kambalda; a smelter at Kalgoorlie that produces nickel-in-matte; and the Kwinana refinery which produces nickel metal as powder or briquettes, and now a nickel sulphate plant that will convert nickel powder into nickel sulphate for the battery market.
BHP says 85% of its nickel metal is currently sold to the battery market.
