Nickel: Tesla boss Musk cries out for more nickel

Tesla boss Elon Musk has pleaded with miners to supply more sustainably-sourced nickel. Nickel is a crucial ingredient in lithium-ion batteries used to power much of the company’s fleet of EVs. “Tesla will give you a giant contract for a long period of time if you mine nickel efficiently and in an environmentally sensitive way” Musk was quoted as saying.

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The move to higher nickel cathode chemistries in EV lithium-ion batteries to boost energy density (increasing the range on a single charge), means that demand for nickel from the battery sector is expected to rise significantly. Currently, the battery sector accounts for approximately 5% of total primary nickel demand, however, Roskill forecasts this to soar to over 25% by the end of the decade.

Despite Musk’s plea, sourcing nickel that is suitable for use in batteries complicates his request. Last year, roughly 60% of production was in the form of Class II nickel, destined exclusively for the stainless steel industry. With respect to nickel in batteries, Roskill believes the pinch point in the lithium-ion battery supply chain is the supply of battery-grade nickel intermediates for producing nickel sulphate, used in cathode pre-cursor materials. Several high-pressure acid leach (HPAL) plants are under construction in Indonesia to produce such nickel intermediates but plans for tailings disposal are already raising eyebrows with regards to the potential environmental impacts. Controversial methods including deep sea tailings placement (DSTP) are currently being considered, with companies citing the difficulties of safe, on-land storage using tailings dams.

Although the majority of recent growth in nickel mining has come from laterites, nickel from sulphide ore has the advantage of higher grades and lower energy consumption during processing. In its latest Life Cycle Assessment (LCA), the Nickel Institute estimates the average Global Warming Potential (GWP) for the production of nickel sulphate to be 5.4kg CO2 eq./kg NiSO4. Going forwards, this could prove an important feature, with ESG criteria looking set to play an increasingly significant role in battery raw material procurement.

Roskill’s Nickel: Outlook to 2029, 16th Edition report was published in April 2020 and outlines industry trends and forecasts for the next decade. The report forecasts nickel mine supply used in Class I and Class II production. Click here to download the brochure for the report, or to access further information.

Roskill’s Nickel Sulphate: Outlook to 2029, 3rd Edition report was published in May 2020 and includes forecast trends in supply, demand and pricing over the next decade. The report provides detailed profiles for new potential producers and analyses the availability of various feedstock types. Click here for more information.

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This article was written by Jack Anderson. Please get in touch below if you wish to discuss further:

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