Insight
Battery demand
resuscitates nickel
The global interest
in lithium-ion
batteries and
electric vehicles
has interesting
implications
for traditional
commodities like
nickel, writes
Adam Webb,
senior analyst at
metals and mining
research company
S&P Global Market
Intelligence.
[40] MINING MIRROR MAY 2018
T
he recent buzz in the
commodities sector around
lithium-ion batteries and their
use in the growing electric vehicle
market has centred around relatively
minor commodities such as lithium,
cobalt, vanadium, and graphite.
However, it also holds implications
for major commodities and, based on
current technology, it seems likely that
nickel will play an important part in
this story. Lithium-ion batteries, used
by many of the major electric vehicle
manufacturers, use a cathode that is
primarily composed of nickel.
Not all nickel supply, however, is
suitable for manufacturing battery
cathodes. Only 49% of the 2017 nickel
supply from sulphide and limonite
deposits is suitable for this purpose,
and extracting nickel from the latter
deposits is less attractive as costs are
generally higher than from sulphide
deposits. Discoveries of new nickel
deposits, particularly sulphides, are
rare. Reports suggest Tesla uses a
lithium-ion battery with a cathode
primarily composed of nickel, cobalt,
and aluminium. These batteries
typically have a cathode composition
of 85% nickel, 10% cobalt, and 5%
aluminium.
Another widely used lithium-ion
battery in current electric vehicles
is the nickel, manganese, and cobalt
battery, which is used in electric
vehicles produced by Chevrolet and
Nissan. This battery has a cathode that
is typically made up of 60% nickel,
20% manganese, and 20% cobalt.
Many manufacturers of this
battery are now working towards
producing batteries with cathodes
containing 80% nickel, because
higher nickel content in these
batteries increases energy density
and extends vehicle range.
Other battery technologies are
either already available or under
development that use less or no
nickel. However, given that the
major electric vehicle producers are
favouring batteries with significant
nickel content, we believe it likely
that nickel will continue to be
an important commodity in the
manufacture of lithium-ion batteries
for use in electric vehicles.
There are complications, though.
Not all forms of nickel-containing
products from mining operations
are suitable for use in batteries.
Nickel sulphate can only be produced
economically from class one nickel
products, which are defined as
products with a nickel content of 99%
or more. Some 51% of production
in 2017 could not be used towards
production of lithium-ion batteries.
We estimate that mined nickel
supply will grow 12% from 2017
to 2020. However, we forecast that
mined supply suitable for battery
manufacture will only grow 2% over
this period. Although there is a lack
of new discoveries of nickel, S&P
Global Market Intelligence has
identified nine projects with nickel
reserves suitable for lithium-ion
battery sector.
Whether existing nickel supply
and these potential additions will be
sufficient to supply the long-term
demand for nickel in the production
of lithium-ion batteries remains to
be seen. A lot will depend on how
quickly electric vehicles displace
internal combustion engine vehicles.
If there is a shortfall, then it may
lead to increases in the nickel
price that could allow previously
uneconomic projects to become viable
and incentivise greater exploration
spending on battery nickel. b