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price, pushing most Australian nickel sul- precursor market,” Lougher said.
phide mines into marginal territory. While miners have rarely dealt directly
The chemical requirement of the bat- with end-users, Lougher believes the time
tery sector has turned that cost equation is coming. European, US, Japanese and
on its head. Nickel sulphide concentrate Korean car manufacturers are increas-
offers a cheaper, most efficient route to ingly desperate to lessen their reliance
nickel sulphate production than NPI, plac- on China for battery ingredients such as
ing the WA nickel miners in prime position nickel, lithium and cobalt and could soon
to meet battery demand. It is a demand find themselves speaking with the source.
shift Western Areas has spent four years In July, Tesla Motors Inc chief Elon Musk
assessing. expressed his eagerness to secure nickel
“We are bullish on nickel,” Lougher supply, tweeting: “Tesla will give you a gi-
said. “NPI supply is sorting out the stain- ant contract for a long period of time if you
less steel sector’s requirements and has mine nickel efficiently and in an environ-
a good growth profile but new demand is mentally sensitive way”.
coming from modern uses such as jet en- “That’s the next stage, encouraging
gine alloys and EVs. NPI can’t satisfy the OEMs to buy through the mining houses;
entire world of nickel demand. The prob- that’ll be the next catalyst for the nickel
lem is the price is still too low to incentiv- sector,” Lougher said.
ise new nickel development.” However, if a major car manufactur-
The question for Western Areas and er were to strike a deal over supply at
its peers is how it takes advantage of source, it would demand long-term sup-
the shift. Junior WA nickel miners have ply guarantees which leaves few options
traditionally locked themselves on nickel in the current nickel market. That is where
concentrate offtake contracts with BHP Lougher sees opportunity for his com-
Nickel West or, in the case of Western pany and its latest, long-life development.
Areas, Chinese stainless steel produc- “Western Areas, with Forrestania and
ers. BHP Nickel West is already making Odysseus, has the capacity and the mine
its own moves into the battery precursor life to start those conversations now.”
market with the construction of a nickel If he is right, the company could be just
sulphate plant at its Kwinana refinery, but at the start of its epic journey.
Western Areas and others are consider- – Dominic Piper
ing their own futures.
“The big strategic challenge for us now
is how we integrate our product into the

Page 26 OCTOBeR 2020 aUSTRaLIa’S PaYDIRT