BHP braces for Indonesian supply surge as nickel hits two-year low – by Peter Ker (Australian Financial Review – October 5, 2023)

BHP says electric vehicle manufacturers are not yet willing to pay a “green premium” to recognise the sustainability credentials of nickel mined in Australia, at a time when surprisingly large volumes of Indonesian nickel have dragged down prices for the metal to a two-year low.

BHP’s chief development officer Johan van Jaarsveld said the company would maintain a policy of only investing in the sort of “sulphide” nickel geology that occurs in Australia and Canada, but was bracing for more nickel supply growth from Indonesian miners working in “laterite” geology.

Indonesian miners raised nickel output by 26 per cent in the first half of 2023, driving global nickel supply up more than 13 per cent and overshadowing a 2.4 per cent rise in global demand for nickel. The department of industry expects nickel supply will exceed demand in the year ahead and force down prices, which have slumped by 40 per cent since December.

Nickel was traditionally sold to stainless steel makers, but battery and carmakers are increasingly big consumers because the best energy density is provided by batteries with nickel, manganese and cobalt chemistries. More energy-intensive refining stages are required to turn nickel laterites into battery-grade nickel than the sort of nickel sulphides that BHP mines in Western Australia.

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