AlexLMX/iStock via Getty Images
AlexLMX/iStock via Getty Images
Welcome to the nickel miners news for March. The past month was probably the wildest month ever for nickel prices!
Nickel prices skyrocketed higher due to the Russia-Ukraine war leading to a short squeeze on the LME. This led to nickel trading on the LME being halted as well as some trades being reversed, in a huge market drama for participants.
Meanwhile the nickel producers (except Russia's Norilsk Nickel which crashed) were beneficiaries of higher prices and stronger sentiment. Many lithium juniors also saw strong sentiment as the market begins to better value security of nickel supply from safer countries.
As of March 30, the nickel spot price was USD 15.44, up very significantly from USD 11.32 last month. LME shows the price at USD 33,050/tonne. Nickel inventory at the London Metals Exchange [LME] was again significantly lower than last month at 72,630 tonnes (81,132 tonnes last month).
Nickel spot price chart - Current price = USD 15.44/lb
Battery nickel demand set to surge over tenfold this decade as the EV boom takes off (2020 chart)
UBS forecasts Year battery metals go into deficit (2021 chart)
Source: UBS courtesy Carlos Vincens LinkedIn
Nickel demand v supply forecast - Deficits widening from 2022 onwards
Source: Garibaldi Resources March 2021 presentation and courtesy of Wood Mackenzie
2021 IEA forecast growth in demand for selected minerals from clean energy technologies by scenario, 2040 relative to 2020 - Increases Of Lithium 13x to 42x, Graphite 8x to 25x, Cobalt 6x to 21x, Nickel 7x to 19x, Manganese 3x to 8x, Rare Earths 3x to 7x, and Copper 2x to 3x
On March 8 Mining.com reported:
LME halts nickel trading after unprecedented 250% spike. The London Metal Exchange suspended trading in its nickel market after an unprecedented price spike left brokers struggling to pay margin calls against unprofitable short positions, in a massive squeeze that has embroiled the largest nickel producer as well as a major Chinese bank. Nickel, used in stainless steel and electric-vehicle batteries, surged as much as 250% in two days to trade briefly above $100,000 a ton early Tuesday. The frenzied move — the largest-ever on the LME — came as investors and industrial users who had sold the metal scrambled to buy the contracts back after prices initially rallied on concerns about supplies from Russia. A Chinese tycoon who built a massive short position in the nickel market is facing billions of dollars in mark-to-market losses as a result of the surge in prices, according to people familiar with the matter.
More details here on the LME halt caused by the nickel short scandal - The 18 Minutes of Trading Chaos That Broke the Nickel Market
On March 11 BNN Bloomberg reported: "Senators urge Biden to invoke Defense Act for battery materials."
CERAWEEK As EV demand rises, Biden officials warm to new mines...U.S. regulators are warming to approving new domestic sources of electric vehicle battery metals...Granholm told conference attendees she would work to streamline permitting for new sources of EV minerals, eliciting loud applause.
How a handful of metals could determine the future of the electric car industry...Companies are betting hundreds of billions of dollars on electric cars and trucks. To make them, they'll need a lot of batteries. And that means they need a lot of minerals, like lithium, cobalt and nickel, to be dug up out of the earth. These minerals aren't particularly rare, but production needs to scale up massively — at an unprecedented pace — to meet the auto industry's ambitions...Beijing controls about three-quarters of the market for the minerals that are essential for batteries...Demand for some mined products could scale up tenfold within a handful of years...
Electric-car makers should rethink raw material supply chains -RBC..."Either way, the lesson for autos is to re-think value chains, especially as the industry moves to battery electric vehicles," Spak wrote, noting the recent jump in nickel prices could translate to a $1,000-$2,000 increase in the cost of a battery pack for an electric-car maker. A variety of input prices, including for lithium, nickel, cobalt and copper, could move "a lot" in the next few years due to mismatches in demand and supply, he added.
On March 15 Seeking Alpha reported:
Inflation hits the EV industry as Tesla raises prices...For the second time in less than a week, Tesla (NASDAQ:TSLA) is raising prices in the U.S. and China to cope with the costs of raw materials. Prices have surged in recent month, from aluminum and palladium used in bodywork and catalytic converters to nickel and lithium that power EV batteries.
How a global nickel shortage could disrupt the electric vehicle industry...While there’s enough nickel in the ground to support a major EV ramp up, there are not enough planned mining projects or processing facilities to make the type of high-grade nickel that’s needed for EV batteries.
On March 25 The Intercept reported:
Biden administration drafting order to invoke Defense Production Act for green energy storage technology. A draft of the executive order obtained by The Intercept would use the Defense Production Act to ramp up mineral production for electric car batteries...The order would declare that “ensuring robust, resilient, and sustainable domestic industrial base to meet the requirements of the clean energy economy is essential to our national security,” according to a draft of the document that remains in the “pre-decisional” phase...The order would specifically says “domestic mining, beneficiation, and value-added processing of strategic and critical materials from sustainable sources for the production of large capacity batteries for the automotive, e-mobility, and stationary storage sectors is essential to national defense.”
On March 29 Mining.com reported: "LME to hold independent review into nickel crisis."
Vale plans a US$1.7B Voisey's Bay expansion plan to boost their nickel production. Construction began in 2018 and is expected to be complete by 2022. You can read more here.
On February 24, Vale SA announced:
Vale’s performance in 4Q21 and 2021. In 4Q21, Vale reported a pro forma adjusted EBITDA of US$ 6.959 billion, US$ 150 million lower than 3Q21. LME nickel prices averaged US$ 19,821/t in 4Q21, 4% higher quarter over quarter and 24% higher than 4Q20 ...
On March 22, Vale SA announced:
Vale to supply Northvolt with low-carbon nickel products for batteries... Vale is a leading global producer of low-carbon and high purity nickel products. Rounds from the company’s Long Harbour refinery in Newfoundland, Canada, have a verified carbon footprint of 4.4 tons CO2 equivalent per ton of nickel – about one-third the Nickel Institute average for Class 1 nickel. The company has pledged to invest between US$4 billion and US$6 billion to cut absolute carbon emissions 33% by 2030, as part of efforts to reach net zero emissions by 2050. Vale will also reduce 15% of its value-chain emissions by 2035. Northvolt’s ambition is to raise the sustainability bar for battery producers with a plan to reduce carbon emissions by up to 90% compared to benchmark batteries today, primarily by leveraging clean energy in production and recycling.
On March 4 Reuters reported: "London Stock Exchange suspends remainder of Russian firms."
On March 4, Norilsk Nickel announced: "Nornickel gets free, prior and informed consent to relocation and development programme from Tukhard residents."
On March 5 Norilsk Nickel announced: "Nornickel to carry on with projects in Siberia."
On March 12 Mining.com announced: "Norilsk cleared to pay debt in foreign currency, Potanin says."
Russia's Nornickel hit hard amid sanctions, owner says...Potanin said the company also faced "logistical problems due to the refusal of a number of European ports to handle our cargo." But he said that those problems were "not yet critical."...The metals tycoon said that Nornickel was developing a way of redirecting European and American supplies to China and other countries that had not sanctioned Russia.
On March 25 Norilsk Nickel announced: "Nornickel sold its subsidiary airline Nordstar."
BHP's Nickel West (includes the Mt Keith nickel mine in Australia) has a Measured and Indicated Resource of 4.1Mt contained nickel with a Total Resource contained nickel of 6.3Mt, with an average grade of 0.58% Ni in sulphide ore. Nickel West produced 80 kt of nickel in FY 2020. Stage 1 production of the Kwinana Nickel Refinery is aimed to be 100ktpa nickel sulphate.
No nickel related news for the month.
On March 28 Jinchuan Group International Resources announced:
Jinchuan International announces 2021 annual results p rofit attributable to shareholders surges 303% to US$120.5 Million. Projects continue to make good progress business segment revenue achieves significant growth.
On March 23, Sumitomo Metal Mining Co. announced: "Completion of the mine life extension development at the Northparkes Mine in Australia."
On February 24, Anglo American announced: "Anglo American preliminary results 2021." Highlights include:
Financial highlights for the year ended 31 December 2021
On March 18, Anglo American announced:
Anglo American partners with EDF Renewables to secure 100% renewable energy supply for South Africa operations.
On March 25, Anglo American announced: "Anglo American completes sale of remaining shareholding in Thungela Resources."
Anglo American's Barro Alto nickel smelter and mine is located in Brazil
On March 16, Eramet announced: "Eramet announces major progress in its battery recycling project..."
No significant news for the month.
On March 14, IGO Limited announced:
Update on the proposed acquisition of Western Areas via Scheme of Arrangement. IGO and Western Areas entered into a binding scheme implementation deed [SID] pursuant to which IGO would acquire Western Areas for cash consideration of $3.36 per Western Areas share (Transaction). Upon announcement of the Scheme, the Board of Western Areas unanimously recommended that Western Areas shareholders vote in favour of the Scheme (in the absence of a superior proposal and subject to an independent expert concluding that the Scheme is in the best interests of Western Areas shareholders).
Panoramic's Savannah mine and mill has a forecast life of mine average annual production rate of 10,800t of nickel, 6,100t of copper and 800t of cobalt metal contained in concentrate.
On March 10, Panoramic Resources announced: "New nickel zone confirmed at Savannah North ." Highlights include:
On March 3, Nickel Mines announced: "Withdrawal of Share Purchase Plan."
On March 14, Nickel Mines announced:
Oracle Nickel tax concessions, construction and Angel commissioning update. The Directors of Nickel Mines Limited (‘Nickel Mines’ or ‘the Company’) are pleased to advise that the Oracle Nickel RKEF project’s Indonesian operating entity, PT Oracle Nickel Industry (‘Oracle Nickel’ or ‘ONI’) has been granted material corporate tax relief for its RKEF project (‘Oracle Nickel Project’) that is currently under construction within the Indonesia Morowali Industrial Park (‘IMIP’). Oracle Nickel is an Indonesian domiciled PMA 1 company with an RKEF project that comprises 4 RKEF lines with a name plate capacity of 36,000 tonnes of nickel per annum and a 380MW power plant, in which the Company is acquiring a 70% interest via Oracle Development Pte. Ltd., a Singaporean- domiciled company.
No news for the month.
Owns the Kambalda Nickel Operations (includes the Cassini nickel sulphide mine), just south of Kambalda in Western Australia. First nickel concentrate is set to begin in Q2 2022.
On February 28, Mincor Resources announced: "Half-year financial report 31 December 2021." Highlights include:
During the half year, the Company continued with development at its the Kambalda Nickel Operations (“KNO”), which comprise the Cassini and Northern Operations. Key milestones achieved included:
On March 21, Mincor Resources announced: "Significant new nickel surface taking shape at golden mile. Definition of new mineralised surface within the Golden Mile exploration zone highlights potential for Resource growth in close proximity to existing infrastructure at Long, Durkin North." Highlights include:
On March 23, Mincor Resources announced:
F irst development ore intersected at Cassini. Another historic milestone achieved with first nickel ore intersected at the new Cassini mine; First nickel concentrate production from the Kambalda Nickel Operations now firmly in sight ... Further de-risks the ramp-up to first nickel concentrate production, forecast in the June 2022 quarter.
First Quantum Minerals [TSX:FM] (OTCPK:FQVLF), Franco/Nevada [TSX:FNV], MMG [HK:1208], South32 [ASX:S32], Lundin Mining [TSX:LUN], Nickel Asia Corporation [PSE:NIKL] (OTC:NIKAY).
Horizonte is developing its 100% owned Araguaia Nickel Project (Araguaia) as Brazil’s next major ferronickel mine.
On February 25, Horizonte Minerals Plc announced: "Award of furnace contract to Hatch Ltd. for the Araguaia Project."
On March 16, Horizonte Minerals Plc announced:
Closing of US$346.2 million Senior Debt Facility and US$25 million cost overrun facility.
On March 28, Horizonte Minerals Plc announced: "Final results for the year ended 31 December 2021." Highlights include:
On March 10, Poseidon Nickel announced:
Interim financial report f or the six months ended 31 December 2021. During the period the Company announced its “Fill the Mill” strategy which focuses on the restart of Black Swan operations. The results of an engineering study undertaken by GR Engineering Limited (“GRES”) concluded that the costs to refurbish the 1.1Mtpa processing plant would cost approximately $22 million. The Fill the Mill strategy is based on feeding the mill with a combination of low-grade open pit ore, high-grade underground ore and Silver Swan tailings to improve concentrate quality (specifically the Fe:MgO ratio). Progressing the “Fill the Mill” strategy the Company announced maiden resource estimates for both the Silver Swan Tailings and Golden Swan. The estimate for the Silver Swan Tailings resource was 675kt grading at 0.92% Ni and 683ppm Co containing 6,200 tonnes of nickel and 460 tonnes of cobalt. The Golden Swan estimate included an Indicated Resource of 111,600 tonnes at 4.7% Ni for 5,200 tonnes contained Ni and Indicated and Inferred Resource of 160,000 tonnes at 3.9% Ni for 6,250 tonnes. Drilling programs also continued at Black Swan with the aim of increasing mining inventory for the proposed restart...
On March 17, Proactive Investors reported:
Poseidon Nickel and Pure Battery Technologies secure A$119.6 million grant for integrated battery material refinery hub... "This includes $119.6 million for Pure Battery Technologies’ $399 million Western Australian pCAM Hub, in partnership with Poseidon Nickel, (who) will build an integrated nickel manganese cobalt battery material refinery hub in the Kalgoorlie region."
No news for the month. The Company's stock price has been negatively impacted by having their flagship project in Russia.
Tamarack is a high grade nickel-copper-cobalt project located in Minnnesota, USA, with considerable exploration upside. Talon Metals owns a 51% project share, with potential to further earn-in to a 60% share by 2026.
On March 23, Talon Metals announced: "US EV battery supply chain: Talon metals announces numerous high-grade nickel-copper intercepts outside main resource area at Tamarack Nickel Project." Highlights include:
No news for the month.
Owns the West Musgrave nickel-copper project in Western Australia as well as several other mines.
On March 11, OZ Minerals announced:
OZ Minerals 2021 annual and sustainability report ... Looking at the potential for an on-site, downstream nickel processing plant, and seeking interest from third parties in its development.
On March 18, OZ Minerals announced: "Janus, Qube and OZ Minerals: Partnering for a Zero Emissions Future - Vision Electric."
The Cathedrals, Stricklands and Investigators nickel-copper discoveries (at Mt Alexander) are located on E29/638, which is held in joint venture by Western Areas Limited (25%) and St George (75%). St George is the Manager of the Project with Western Areas retaining a 25% non-contributing interest in the Project (in regard to E29/638 only) until there is a decision to mine.
On March 10, St George Mining Ltd. announced:
Positive metallurgical test work results for Mt Alexander. High-grade nickel and copper concentrates produced with strong credits for PGEs, cobalt and gold from the Stricklands Deposit ...Additional areas of potential resource identified: Opportunity to add further shallow nickel-copper sulphide mineralisation to the potential resource inventory with minimal cost. Massive sulphide lens approximately 350m to the west of Stricklands is prioritised for resource drill-out. Massive sulphide deposit at the Cathedrals Prospect – with fresh massive nickel-copper sulphides starting 20m below surface – was drilled out in 2021 with assays pending.
On March 16, St George Mining Ltd. announced: "Half yearly report for the half year ended 31 December 2021."
On March 29, St George Mining Ltd. announced:
Exploration update – Mt Alexander high-grade nickel-copper project...Comprehensive project-wide review has highlighted five large conceptual targets for nickel-copper-PGE mineralisation, most with minimal or no previous drilling.
On March 15, Sama Resources announced:
Hole GR-06 at the newly discovered Grata prospect in Ivory Coast returned 14 m grading 0.86% nickel, 1.49% copper and 1.38 gpt palladium within a wider mineralized zone of 128 m grading 0.30% nickel, 0.35% copper and 0.47 gpt palladium. Ivanhoe Electric to continue Earn-In on the Ivory Coast projects.
On March 22, Sama Resources announced:
Sama Resources Québec completed a 1,494 line-km HELITEM2 Survey at the Lac Brulé Nickel-Copper Project in the Province of Québec outlining several high conductivity zones...Based on these excellent results, a large exploration program is planned for summer 2022 at the Lac Brulé and Lac Brennan properties. Exploration works will include geological mapping and sampling, ground geophysical survey aimed at drilling priority targets by the fall of 2022...
No news for the month.
On March 8, Canada Nickel Company announced: "Canada Nickel announces C$25.0 million bought deal Public Offering."
On March 9, Canada Nickel Company announced: "Canada Nickel announces upsize of bought deal Public Offering to C$45.0 million."
Investors can view a CEO video here, or my CEO interview here on Trend Investing.
On March 7, Giga Metals announced:
Giga Metals - options granted. Giga Metals Corporation today announced that, pursuant to its Stock Option Plan, approved by the TSX Venture Exchange, the Company will be granting 1,875,000 stock options to certain Directors, Employees and Consultants, exercisable at $0.40 per share, expiring March 7, 2027. 25% of the options will vest immediately, with an additional 25% vesting on each anniversary after issuance. 100% of the options will vest in the event of a change of control of the Company.
On March 10, Giga Metals announced: "Giga Metals announces expiry of Over-Allotment Option."
On March 4, Ardea Resources announced: "Interim financial report h alf-year ended 31 December 2021 ."
On March 7, Ardea Resources announced: "Emu Lake nickel sulphide follow - up drilling c ommenced."
On March 11, Ardea Resources announced: "Goongarrie Hub water extraction licences granted."
On March 14, Ardea Resources announced: "High-grade nickel-cobalt confirmed at Kalpini with scandium and rare earth elements." Highlights include:
On March 18, Ardea Resources announced: "Kalgoorlie Nickel Project awarded Major Project Status ." Highlights include:
On March 21, Ardea Resources announced: "Kalgoorlie Nickel Project recognition on all tiers of Australian Government ."
Centaurus Metals is an Australian-based minerals exploration company focused on the near-term development of the Jaguar Nickel Sulphide Project, in Northern Brazil.
On March 7, Centaurus Metals announced:
Jaguar Nickel Project selected as strategic minerals project by the Brazilian Government. Selection recognises Jaguar’s status as a globally significant long-life green nickel sulphide project .
On March 9, Centaurus Metals announced:
New high-grade results reinforce scale and quality of Jaguar as an emerging rare, Tier-1 Global Nickel Project. Step-out drilling returns exceptional results including 8.0m at 5.38% Ni at Jaguar South and 30.7m at 1.00% Ni at Onça Preta, from some of the deepest drilling (+400m) completed on the Project to date...The Jaguar December 2021 Mineral Resource Estimate [MRE], comprising 80.6Mt @ 0.91% Ni for 730,700 tonnes of contained nickel, is already one of the largest nickel sulphide resources held by an ASX-listed company and the largest outside of the majors. Next Mineral Resource update scheduled for Q3 2022. There are currently 14 rigs on site (12 diamond and 2 RC) drilling double shift with the drilling currently focused on upgrading the maximum amount of MRE into the Measured and Indicated categories. Company is well-funded with cash reserves of approximately $75 million.
On March 29, Centaurus Metals announced: "Financial report 31 December 2021."
Artemis Resources [ASV:ARV], Australian Mines [ASX:AUZ], Blackstone Minerals [ASX:BSX], Cassini Resources [ASX: CZI] (OTC:CSSQF), Class 1 Nickel and Technologies Ltd. [CSE:NICO] (OTCQB:NICLF), Electra Battery Materials [TSXV:ELBM] (OTCQX:ELBMF) (Electra Battery Materials Park), Electric Royalties [TSXV:ELEC], Flying Nickel Mining Corp. [TSXV:FLYN], FPX Nickel [TSXV:FPX], Grid Metals Corp [TSXV:GRDM], Group Ten Metals Inc. [TSXV:PGE] (OTCQB:PGEZF), Horizonte Minerals Plc [TSXV:HZM] [LON:HZM] (OTCPK:HZMMF), Inomin Mines [TSXV:MINE], Jervois Mining [ASX:JRV][TSXV:JRV] (OTCPK:JRVMF), New Age Metals [TXV:NAM], Nickel Creek Platinum [TSX:NCP] (OTCQX:NCPCF), Pancontinental Resources Corporation [TSXV:PUC], Polymet Mining [TSX:POM], Power Nickel [TSXV:PNPN] (OTCQB:CMETF), Renforth Resources [CSE:RFR] (OTCQB:RFHRF), Rox Resources [ASX:RXL], S2 Resources (ASX:S2R), Sunrise Energy Metals [ASX:SRL] (OTCQX:SREMF), Surge Battery Metals Inc. [TSXV:NILI] [FRA:DJ5C] (OTCPK:NILIF), Talisman Mining Ltd. [ASX:TLM], Tartisan Nickel Corp. [CSE:TN] (OTCPK:TTSRF), Transition Metals [TSXV:XTM], URU Metals Ltd. [LSE:URU] [GR:NVRA], Wall Bridge Mining [TSX:WM], Widgie Nickel [ASX:WIN], and Zeb Nickel Corp. [TSXV:ZBNI] (ZBNIF).
Note: Some of the above companies are covered in the Cobalt monthly news.
Nickel spot prices skyrocketed higher in March with huge LME trading dramas. LME inventory was significantly lower.
Highlights for the month were:
As usual, all comments are welcome.
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Disclosure: I/we have a beneficial long position in the shares of BHP GROUP [ASX:BHP], VALE SA (VALE), NORILSK NICKEL [LSE:MNOD], ARDEA RESOURCES [ASX:ARL], AMUR MINERALS [LN:AMC], JERVOIS GLOBAL [TSXV:JRV], ELECTRA BATTERY MATERIALS [TSXV:ELBM], WIDGIE NICKEL [ASX:WIN] either through stock ownership, options, or other derivatives. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.
Additional disclosure: The information in this article is general in nature and should not be relied upon as personal financial advice.