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Nickel ain’t nickel

25 March 2022
Rueben Hale

Breakneck volatility has returned to nickel markets with the frontline battery metal surging 15 per cent for the second straight day on the London Metals Exchange.

Interestingly, the surge is mainly because China’s Tsingshan Holding Group bought large amounts to hedge its short bets on the metal.

Why is it necessary for China, one of the world’s top nickel producers, to cover for a potential supply vacuum?

This month, nickel quadrupled in price over 48 astonishing hours, sending the LME into a remarkable even surreal trading halt.

Why? …

Nickel ain’t nickel

Put simply – China could not make high-grade class-1 nickel used most notably in lithium-ion batteries quickly enough to meet demands.

Sure, China is one of the world’s largest nickel producers of high-grade nickel, but a lot of it is made from low-grade pig iron using lots of time and lots of electricity.

On the other hand, Western Australia’s Department of Mines Mines, Industry Regulation and Safety executive Jeff Haworth reckons our state, at least, has no such issue.

The Geological Survey and Resource Strategy director declares Western Australia has some of the largest and highest-grade nickel sulphide deposits globally, which are suitable for battery manufacture, and is among the top five global nickel producers.

“Expected demand for battery minerals, including nickel, has encouraged extensive exploration and the reopening and development of new nickel mines across the state,” Haworth proudly boasts.

“Further downstream processing has also been encouraging with the recent opening of BHP’s Nickel West nickel sulphate plant in Kwinana and research into precursor cathode and anode manufacture in Western Australia,” he adds.

And given the current troubles around the world, setting up shop in Australia is becoming an increasingly attractive proposition for explorers.

“WA also has a global reputation as a stable, well-regulated and innovative mining jurisdiction,” Haworth goes on.

“While nickel exploration and production continues to grow, plenty of investment opportunities remain in highly-prospective areas.”

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