The US government should invest in nickel refining capacity in coordination with its allies, for the critical battery supply chain, according to a recent report from the Biden administration.
–
It’s an unexpected priority. Nickel is not, or not yet, on the US list of critical metals. Yet the United States depends on imports. 68% of nickel supplies come, according to the report, from “allied nations” such as Canada, Australia, New Caledonia, Norway and Finland.
“If there are opportunities for the United States to target and develop part of the battery supply chain, it must be seized to ensure the stability of the sector in the short and medium term and the independence of the country. “, indicates the report of the White House, quoted by the agency Reuters.
New Caledonia
Tesla CEO Elon Musk did not wait for these recommendations. It purchases part of the output from the South Caledonian plant (Prony Resources) which produces battery-grade nickel. A production essential for the supply and security of the United States. Especially for batteries intended for military use.
Especially since China has a comparable nickel plant in Papua New Guinea with the industrial site of Ramu.
The United States relies on imports for the full spectrum of sensitive metals, with much of the supply chain captured by China, a problematic trading partner and identified military adversary.
In June, the Department of Energy (DOE) identified Class 1 nickel, the type best suited for lithium-ion batteries, both as “a vulnerability and an opportunity”.
The focus on nickel doesn’t mean the White House is losing interest in other critical battery materials like lithium and cobalt, but battery-grade nickel is now a priority.
The ambition is therefore to further stimulate national mining and, more importantly, national transformation through a mix of purchase guarantees, federal funding and research and development.
President Biden pledged to invest in US domestic manufacturing capabilities and move the country away from its dependence on adversaries – including China – for essential inputs
When it comes to nickel, however, the only active US mine – the Eagle site in Michigan – is due to close in 2025 and the national deposits are small and low-grade. There is no national nickel processing capacity other than a limited amount of production and processing.
Quantities of intermediate class 1 nickel are imported in particular from Australia (Murrin Murrin) and New Caledonia (Prony Resources), before being refined one last time in small hydro-metallurgical units in North America. There is Canada, Sudbury’s large mineral deposits are not that far away, but the production of battery-grade nickel is not yet the priority.
This “specific” nickel, intended for batteries, is the one that will probably experience the greatest increase in demand over the next few years, underlines the report of the Biden administration, with “indications that there could be a great shortage of Class 1 nickel over the next 3 to 7 years.”
This is because with the increase in the nickel content in the design of battery cathodes, not having enough of the right type of nickel “poses a risk to the battery supply chain in the western world, not just the United States”.
Demand for nickel grows as automakers try to cut back on their use of cobalt, a metal overshadowed by a poor supply chain that depends on the Democratic Republic of the Congo (DRC) where child labor is still believed to be common in the mines .
The United States Department of Energy therefore wants to help American automakers by engaging in “a multi-year initiative to solve scientific and technical problems related to the reduction and elimination of cobalt in batteries of electric vehicles”.
Building recycling capacity will also be key to reducing dependence on minerals, government experts say.
Battery recycling could cover up to 30% of nickel and 80% cobalt use in electric vehicles by the end of the decade, but there are many hurdles to getting there.
It will take a national recycling policy to coordinate a sector that is currently fragmented by state legislation. “Without uniform legislation, the batteries of American motorists will go to the landfill or be exported to other countries where the metals will be extracted.”
NICKEL EMERGENCY
The world will need a lot more “of this new nickel” before recycling can have a real impact, estimates for its part the agency Reuters.
“There is an ongoing nickel mining and processing boom in Indonesia,” a plant whose production will be comparable to that of Prony Resources in New Caledonia, is under construction.
But rather than offering any comfort to the United States, the dominance of Chinese actors, like Tsingshan, simply means that the country is at risk. “to fall further behind China in this critical mineral”.
As such, “there is an urgent need to develop a strategy around class 1 nickel”, concludes the report. Starting with the construction of a large nickel processing plant financed by the United States. It remains to be seen where …
Nickel price at the LME in London, 06/23/2021 at 6:00 p.m. GMT USD 18,060 + 1.67%
–
