Specialist
Former EVP at Vale Canada Ltd
Agenda
- Nickel sector outlook, including pricing increase
- Formulation change of EV (electric vehicle) batteries and nickel industry implications
- New Caledonia operational risks and challenges
- Long-term battery recycling outlook
Questions
1.
What is happening in the nickel market and do you expect more downward pressure? Although Nickel contracts hit historic highs at the end of February 2021, the price has come down about 13% since then.
2.
Could you outline the commercial and operational viability of converting nickel pig iron into nickel matte, as proposed by Tsingshan recently? What are the cost estimates and challenges from producing nickel matte this way?
3.
Which of the many solutions being suggested for energy storage – such as EV [electric vehicle] storage alternatives and commercial utility scale renewables – stand out as the more significant potential disruptors of nickel demand?
4.
Could you outline the percentage of nickel used in the solid state and how this compares to the more active ingredient batteries? Five years seems to be the average estimate for when solid state will come to market.
5.
What are the considerations about CATL’s [Contemporary Amperex Technology Co Ltd] development of its LFP [lithium-iron phosphate] batteries? To what extent could this disrupt nickel demand? Would it be limited to EVs or could it have broader implications?
6.
What might be the cost impact on battery manufacturers to retool assembly lines for LFP or solid state, especially given how lithium-ion battery production has barely changed in several decades?
7.
The recently agreed sale terms for Vale’s nickel mine to a consortium, which includes Trafigura, means the New Caledonia government will own a 51% stake. What new risks does this create?
8.
Could you elaborate on the topic of technical advisers and operators, especially Tesla’s role?
9.
Could the use of technical advisers become more commonplace with other battery metal suppliers, especially given the intensified supply chain scrutiny on OEMs, EVs and their customers? Trafigura recently talked about creating zones in artisan cobalt mines for DRC [Democratic Republic of the Congo], and Tesla is making efforts to remove the risk of child labour in its supply chain. Is this something that OEMs have the capability to manage, or is it a real synergy of PR to have the miners and OEMs working together on paper?
10.
In a recent Interview [see Cobalt Sector H1 2021 Update – Supply Constraint Analysis & Outlook – 24 March 2021] our expert from the Cobalt Institute spoke about the difficulties of eradicating child labour at the artisanal level. Does anything ultimately change for Tesla or other OEMs if ESG or child labour in the supply chain isn’t rectified? The Prius supply chain footprint from nickel production is reportedly huge and could be said to outweigh the vehicle’s low-emission benefits. Tesla’s cobalt supply chain and associated child labour issues also don’t appear to have hurt its brand or stopped people from buying its cars.
11.
Could you elaborate on ESG practices and CO2 footprint? Historical focus has been around the ethics of oil mining and how assets are decommissioned – there was less focus on the OEMs. Could there be a permanent long-term impact on all aspects of mining, or just as it pertains to battery metals? It seems like their fates are tied together.
12.
What challenges might arise for the new operations at New Caledonia with Vale exiting? What talent pool is available?
13.
How might Vale try to expand its nickel portfolio after exiting New Caledonia and some ageing reserves in Sudbury? Should the focus be on low-risk jurisdictions or reserve sizes?
14.
What do you make of BHP moving its nickel and copper HQ from Chile to Toronto? The announcement followed a partnership with an exploration company out of Quebec. What do you think of this focus on Canada and nickel, considering what you said about larger cost? Which regions outside of Canada have opportunities for low-cost nickel production?
15.
How do facility costs compare in Canada? You said start-up costs and nickel fixed costs are huge and utilisation is paramount. Are these costs substantially more in Canada, or is it just in building the site infrastructures and initial facilities?
16.
What’s your overview on Sherritt-Williams and its operations in Cuba? How might the Biden administration help that situation? How can capacity be expanded?
17.
What do you think could be the major catalyst for growth in the recycling sector? Who is taking the lead?
18.
What are your 2021-22 pricing expectations? Which projects could add significant capacity for global supply?
