Nickel: First Quantum investigating Ravensthorpe re-start

First Quantum Minerals Ravensthorpe

First Quantum Minerals (FQM) is investigating the possibility of re-starting its idled Ravensthorpe nickel/cobalt operation in Australia. The company acquired the mine and processing plant, which produces Mixed Hydroxide Product (MHP), in February 2010, with commercial production reached in December 2011. FQM placed the plant under care and maintenance in October 2017, however, as a result of low nickel prices. Since then, nickel prices have recovered and the company said that if market conditions continue, it expects that operations could resume in the first quarter of 2020.

Roskill view

FQM announced in September 2017 that it was suspending operations at Ravensthorpe because of market conditions. In Q3 2017, the LME nickel cash price averaged 10,524/t, and had been lower still in the previous quarter. Since then, the nickel price has trended higher and in the first quarter of 2019, the LME cash price averaged 12,366/t, and is currently trading around those levels. The nickel price is, therefore, 17.5% higher than it was when the decision to suspend operations was taken. The outlook for the type of product Ravensthorpe produces is also looking strong. MHP, which contains both nickel and cobalt, is suitable feedstock for battery production. With the outlook for batteries looking very healthy because of the expected growth in electric vehicle production, MHP such as that produced by Ravensthorpe should be in demand in the years to come.

Roskill’s NEW Global Industry, Markets & Outlook report for nickel was published in March 2019 and its NEW report for nickel sulphate was published in May 2019. Both reports forecast trends in supply, demand and pricing out to 2028.