Could EV demand cause a shortage of battery-grade nickel? – by Andrew Topf (Stockhouse Publishing – November 2, 2017)

FULL DISCLOSURE: North American Nickel is a paid client of Stockhouse Publishing.

Nickel: The dark horse in the EV battery race

Without a doubt, the barn door that has been cracked open on electric vehicles (EVs) is only going to swing further. One recent projection puts EVs at 16% market penetration by 2030 and 51% by 2040. Several countries including China, France and the UK have signalled they will eventually ban gas-powered vehicles, and one automaker, Volvo, recently announced that starting in 2019, all models will be hybrids or electrics.

This has investors flocking to companies that mine lithium and cobalt – two key ingredients of batteries used in EVs. But it’s a lesser-known fact that nickel, a cheaper, up-to-now industrial metal used primarily in stainless steel, will also be needed for EV batteries.

In fact, so much nickel could be demanded in the next few years that analysts are predicting a shortage of battery-grade nickel. Investors who can identify companies with properties that contain this type of nickel stand to make a bundle, especially those in the early exploration stages.

Why is nickel important?

Because more nickel in the battery solves the two major impediments to mass adoption of EVs, which are range and cost. Nickel cathodes (the part through which electrons enter the battery) intrinsically have a higher energy density. The more nickel content, the longer distance you can travel and it also brings down costs.

Right now the demand (a large part of it being speculation) for cobalt and lithium has spiked the prices of these two metals considerably, which ironically has made EV batteries more expensive to produce and therefore dampens EV market growth. Since 2008 the price of lithium carbonate has doubled from around $4,500 a tonne to $9,000, while cobalt has tripled from $20,000 a tonne to $60,000 just in the last year.

Michael Fetcenko of BASF Battery Materials said during the Benchmark Minerals Cathode Conference: “You can get higher energy in two ways: you can take your existing cathode material and you can widen the operating voltage, or you can use higher nickel content.”

Rising demand for battery-grade nickel

The increased input costs of lithium and cobalt has battery and electric car manufacturers wanting to shift their current mix of materials to using less cobalt or lithium and more nickel, which is currently just under $12,000 a tonne.

For the rest of this article: