BHP revs it up for Tesla-led nickel surge
BHP flags plans to pump hundreds of millions of dollars into an upgrade of its Kalgoorlie nickel smelter.
BHP has flagged plans to pump hundreds of millions of dollars into an upgrade of its Kalgoorlie nickel smelter as it gears up for a Tesla-inspired surge in demand for the metal.
Eddy Haegel, the president of BHP’s Nickel West division, told the Diggers & Dealers Mining Forum in Kalgoorlie on Tuesday that the company would consider new processing methods for its upcoming smelter rebuild that would allow it to increase nickel production and open up a broader range of development options.
He said the company’s nickel growth plans reflected the “huge demand” coming for battery-grade products as a result of electric vehicle and battery storage growth.
“At Tesla’s recent battery day, Elon Musk flagged the enormous demand that will come for nickel as this decade unfolds,” Mr Haegel said.
“His call for nickel miners to grow, and to grow quickly, offers real evidence of the place that nickel has as a strategic battery metal going forward.”
Mr Haegel’s citing of the recent comments from Mr Musk will do nothing to dispel talk of an impending supply deal between BHP and the electric vehicle heavyweight, which has flagged its interest in securing supply from transparent and environmentally sensitive sources. Bloomberg reported last week that the pair were in discussions over a potential agreement.
BHP has been steadily pushing into supplying nickel for battery manufacturers in recent years, with the company closing in on the commissioning of a nickel sulphate plant at Kwinana, south of Perth, that will produce nickel chemicals for use in batteries.
The 50-year-old Kalgoorlie nickel smelter will require a rebuild in the coming years, and Mr Haegel revealed the company was studying two alternative smelting techniques that would be better suited to the company’s current nickel resources.
BHP’s nickel reserves have almost doubled over the past three years, and changing the smelting method at Kalgoorlie from the technique used over the past 50 years would unlock a host of options to grow its nickel output.
The investment and growth plans for Nickel West is a far cry from only a few years ago, when the Nickel West business was considered a millstone around BHP’s neck that was unworthy of being packaged with the other non-core assets into spin-off South32.
Mr Haegel noted that while Tesla’s original Gigafactory had a 30 gigawatt capacity, the company was now talking about terawatts of battery production.
He said nickel was “a standout winner” from a decarbonising world, given the volumes of the commodity required in lithium-ion batteries.
“The greater the global efforts to decarbonise, the stronger the positive impact on demand for nickel,” he said.
The world would need between 250 per cent and 350 per cent more nickel over the next 30 years than it has needed in the past 30 years, he said, depending on the pace of global efforts to decarbonise.
“We are a future-facing commodity, in the right jurisdiction here in WA, with products that will help accelerate the decarbonisation of transportation and — in time — electricity generation, with significant sustainability credentials, and a high-performing culture,” he said.
“And we want to be bigger.”