USA News Group – Despite a price drop in 2023 for nickel, several major players continue to develop a domestic nickel supply, as the metal has critical purposes for battery cathodes, and an EV market still projected to grow. One such group is KoBold Metals, a private mining giant, backed by billionaires Bill Gates, Jeff Bezos, Richard Branson, and Ray Dalio. KoBold uses artificial intelligence (AI) to search for lithium, cobalt, copper, and nickel on more than 60 projects spanning six continents. Meanwhile, automaker General Motors Company (NYSE:GM) just signed a massive $19 billion deal with LG Chem to supply cathode materials by 2035. With the world’s top nickel producer countries placing restrictions on ore exports, more attention is being given to promising domestic nickel projects from groups such as Alaska Energy Metals Corporation (TSXV:AEMC) (OTC:AKEMF), Canada Nickel Company Inc. (TSXV:CNC) (OTC:CNIKF), FPX Nickel Corp. (TSXV:FPX) (OTC:FPOCF), and Nickel 28 Capital Corp. (TSXV:NKL) (OTC:CONXF).
While the battery market continues to go through its growth spurts, researchers have been working on what are called NCM batteries, which pare back more-expensive cobalt in favour of nickel, which provides a higher energy density. So far their work has led to commercial NCM811 battery cathodes with 80% nickel, and soon to follow will be the NCM955, with 90% nickel. Among the battery metals, nickel doesn’t seem to be going away any time soon.
Which is why groups like KoBold Metals’ hunt for nickel led to significant potential in Alaska. In late 2023, KoBold bought exploration data from Alaska Energy Metals Corporation (TSXV:AEMC) (OTC:AKEMF), which is developing its own promising Nikolai Prospect, that some are saying could answer domestic need for nickel , located directly adjoining KoBold’s Alaskan assets. As a reference, an inferred resource current drill results) encompassing 1.55 billion pounds of nickel was calculated based solely on this data for a section of the Eureka Zone at Nikolai.
However, that was before Alaska Energy’s most recent update on the project
, which resulted in a very significant increase in the Nikolai Nickel Project’s Eureka Deposit NI 43-101 Mineral Resource Estimate. According to the latest update, the resource saw an upgrade to the more-preferred Indicated category, with an addition of 813 million tonnes of Indicated nickel resource, at a grade of 0.29% nickel equivalent (NiEq). As well, the update included a 180% increase of the project’s Inferred resource from 319.6 million tonnes to 896 million tonnes, with a grade of 0.27% NiEq, and another addition of 3.877 billion pounds (1.758 million tonnes) of contained nickel to the Indicated resource, and a 172% increase in the Inferred resource contained nickel from 1.552 billion pounds (703,975 tonnes) to 4.225 billion pounds (1.196 million tonnes).
Within a higher-grade core zone Alaska Energy identified a continuity along much of the strike of the deposit, containing an Indicated resource of 211 million tonnes at a grade of 0.34% NiEq and an Inferred resource of 154 million tonnes at a grade of 0.33% NiEq.
To sum this up the Company’s resource estimate grew from a historic data only derived resource of roughly 1.5 billion pounds of contained nickel to over 8 billion pounds on just 8 drill holes. To have an initial resource on purely historic data alone is very unique in the mining industry. This data will be very important in guiding the upcoming drilling program. This doesn’t include the other metals, many of them listed as critical as well, included in a larger NiEq resource of over 10 billion pounds. The market is really starting to look forward to the upcoming drill season with a much larger drill program that could add even substantially more pounds. This now places AEMC as one of the largest domestic nickel deposits in the US.
“With this updated mineral resource estimate, the Eureka deposit of the Nikolai Nickel project represents a globally significant accumulation of nickel and has now become one of the larger known nickel deposits in the United States,” said Gregory Beischer, President & CEO of Alaska Energy Metals. “Nikolai could potentially become an important source of nickel for the USA, catering to the needs of various manufacturing sectors including stainless steel, electric vehicles, defense components, long-term, grid-scale renewable energy storage batteries and a myriad of other uses.”
Another major nickel project that’s gaining traction is coming from Canada Nickel Company Inc. (TSXV:CNC) (OTC:CNIKF), which is proposing to build a US$1 billion nickel processing plant in Ontario, Canada—which would be the largest in North America once completed.
“We’re going to see nickel demand double or triple over the next 10 years as we gear up battery production here in North America,” said Canada Nickel CEO Mark Selby in an interview with CBC News. According to the proposal, Canada Nickel would be seeking funding from both the governments of Ontario and Canada.
Through its wholly-owned subsidiary NetZero Metals Inc., Canada Nickel is aiming high for what it believes represents a paradigm shift in the nickel and stainless-steel industries. As well, the community’s leaders in the Timmins area where the project is proposed seem to be openly embracing the potential opportunity.
“Our government will be there to support Northern communities as our processing capacity for critical minerals is built out,” said Greg Rickford, Minister of Northern Development and Minister of Indigenous Affairs. “We have a tremendous opportunity to expand fully integrated supply chains for the electric battery future, and that starts with investments like these that create high quality jobs for hard working men and women.”
To the West in British Columbia, FPX Nickel Corp. (TSXV:FPX) (OTC:FPOCF) filed a Preliminary Feasibility Study (PFS) for its Baptiste Nickel Project back in October 2023. The PFS outlined an open-pit mining project which will produce an average of 59,100 tonnes of nickel per year in concentrate over a 29-year mine life, with an estimated initial capital cost of $2.18 billion for development.
The potential for the project was enough to draw the attention and investment of the Canadian subsidiary of Japanese mining giant Sumitomo Metal Mining Co. They invested roughly 14.5 MM at a significant premium to market to maintain their ownership position.
Holding an 8.56% joint-venture interest in the Ramu Nickel-Cobalt operation in Papua New Guinea, Nickel 28 Capital Corp. (TSXV:NKL) (OTC:CONXF) kicked off the year giving an update on the project’s 2023 calendar year production of 33,604 tonnes of nickel and 3,072 tonnes of cobalt. These production figures exceeded Ramu’s initial design capacity for the seventh consecutive year.
“Given that Ramu experienced multiple earthquake events in the later half of 2023 and lost over 7 production days to ascertain potential damage from these earthquakes, this is a remarkable achievement,” said Anthony Milewski, CEO of Nickel 28. “In 2024, Ramu will undertake significant capital upgrades to improve longer-term production and reliability levels after 11 years of production.”
Operating Ramu is Metallurgical Corporation of China, which will undertake a US$33 million capital upgrade on the project, requiring a 30-day plant shutdown throughout September.
Seeking to secure a supply of cathode materials (including nickel) for the future, General Motors Company (NYSE:GM) spared no expense in a whopping $19-billion deal with LG Chem. As per the terms of the deal, LG Chem will supply GM with more than 500,000 tons of cathode materials from 2026 through 2035. There are stipulations that a large portion of the input materials including nickel are sourced from the US or friendly free trade partners.
“By strengthening our strategic cooperation with GM, we will jointly lead the North American EV market to a sustainable future,” said LG Chem CEO Shin Hak-cheol. “We aim to create unique customer value through world-class productivity and the expansion of our global production bases.”
Originally the agreement was set to expire in 2030 when initially announced in 2022, but the latest version of the deal expands the agreement by another five years.
“This contract builds on GM’s commitment to create a strong, sustainable battery EV supply chain to support our fast-growing EV production needs,” said Jeff Morrison, GM vice president, global purchasing and supply chain. “Importantly, this work with LG Chem will happen in Tennessee and strengthens the North American supply chain at a critical time for the industry.”
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