BHP’s Nickel West signs supply deal with Toyota, Panasonic
BHP says it has cut a deal to supply nickel to a second major battery supplier for the electric vehicle market.
BHP has cut a nickel supply deal with a second major battery supplier to the electric vehicle market, saying on Thursday it has signed an early stage deal to supply nickel that will help power Toyota’s push into the market, and could lead to BHP establishing a battery recycling plant in WA.
The new supply deal with Prime Planet Energy and Solutions (PPES) – a joint venture between Toyota and battery major Panasonic – comes after the July announcement that BHP’s WA nickel operations would also become a major supplier to Elon Musk’s Tesla.
New Nickel West boss Jess Farrell said on Thursday the mining major had signed a memorandum of understanding with PPES and Toyota Tsusho Corporation for future supply of nickel sulphate from the plant, as well as for a project to develop a “Green Electric Vehicle (EV) Ecosystem” to help track the source of raw materials and improve environmental standards in the battery industry.
The nickel sulphate will come from BHP’s plant in Kwinana, south of Perth, which produced its much-delayed first batch of the battery making ingredient last week.
The plant will convert nickel powder and briquettes produced at the Kwinana refinery into nickel sulphate suitable for use by the battery industry.
When announced in 2017, BHP spruiked the nickel sulphate plant – originally tipped to cost only $US43m – as the cutting edge of its push into the “future facing commodities” needed for global energy transformation, heralding its construction as a major investment in Nickel West – which was only pulled from the market a year before.
But while the mining giant’s nickel division has since returned as a core component of the company’s future growth plans, construction of the nickel sulphate plant has been plagued with problems, with its commissioning now more than two years behind the original schedule of delivering its first product by June 2019.
BHP has not put a price on the cost blowouts at the plant, but now expects to ship its first cargo to paying customers by early 2022, with the ramp up to its full 100,000 tonnes a year capacity expected to take about 18 months.
BHP has also gone quiet on earlier talk of the potential expansion of the plant to 200,000 tonnes per year total capacity.
Ms Farrell said on Thursday BHP expected demand for nickel in the battery sector to grow by 500 per cent over the next decade, with BHP’s nickel sulphate exports expected to supply the construction of up to 700,000 electric vehicle batteries each year.
“We have invested in our Nickel West facilities and power agreements so that we can now deliver some of the world’s most sustainable and lowest carbon emission nickel to customers. We are excited to work with our partners to potentially increase the use of electric vehicles at our operations and further advance our sustainability agenda,” she said.
BHP did not release likely sales volumes under the new agreement.
The agreement with PPES and Toyota will also include work on the possible establishment of a battery recycling plant at BHP’s WA nickel operations, to recover nickel and other raw materials for reprocessing and sale.
BHP shares closed up 1c to $36.86 on Monday.
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