Nickel’s price paralysis could see mines ‘gobbled up’ cheap – by Peter Ker (Australian Financial Review – May 25, 2023)

Miners say pricing mechanisms for nickel have struggled to keep pace with the industry’s shift to supplying the specialised needs of battery and electric vehicle makers, creating an opportunity for acquisitions on the cheap.

Australian nickel was traditionally sold to stainless steel producers in briquettes or powders, but miners such as BHP now sell the bulk of their nickel to electric vehicle manufacturers like Tesla, which want nickel for the cathodes of lithium-ion batteries.

BHP has built a new processing plant at Kwinana in WA to make nickel sulphate crystals, a form of the metal that is particularly desirable to battery makers. No public daily market price for nickel sulphate crystals exists, leaving battery makers and other newcomers to negotiate premiums above the nickel price index the London Metals Exchange has published since 1979.

“The nickel product suite has evolved quite rapidly and we need the pricing mechanisms to evolve with that as well,” BHP nickel boss Jess Farrell said at The Australian Financial Review Mining Summit.

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