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Nickel, often overshadowed by other metals, is quietly playing a crucial role in shaping the future. Its unique properties make it essential to the global push for sustainability and technological advancement. The nickel market has experienced significant growth in recent years, with predictions of further increases. This raises an important question: Has Australia missed its opportunity in this burgeoning market?
As the fifth most common element on Earth, nickel is crucial to a range of industries, including construction, infrastructure, stainless steel production, chemical manufacturing, communications, and energy supply. Its importance is particularly evident in the emerging electrical vehicle (EV) sector.
In terms of production, Indonesia dominates the global nickel market, with output skyrocketing from 345,000 metric tons (MT) in 2017 to an impressive 1.8 million MT in 2023. The Philippines and New Caledonia also make significant contributions to the global supply. However, despite Indonesia’s surge in production, nickel prices have recently declined from their 2022 peaks due to decreased demand in the EV sector and market saturation. Despite this, many still predict that the nickel industry will achieve unprecedented growth by 2030.
The significance of nickel in the EV industry lies in its distinct properties. While most hybrid and all-electric vehicles use lithium-ion batteries, not all of these batteries contain nickel. When nickel is included in the cathode, it enhances the battery’s energy density and driving range – key factors in addressing anxiety associated with EVs. Additionally, nickel's lightweight nature and compact size contribute to the overall efficiency of the car’s design . Although more expensive, incorporating nickel into EV batteries can significantly boost the performance and quality of these sustainable vehicles.
Given nickel’s critical role in the EV sector and the push toward a sustainable future, how has Australia fared in nickel production? In Australia, Western Australia is the primary source of nickel, but the sector is facing significant challenges. The recent success of other countries in global nickel production has diminished its profitability in Australia, leading to its removal from the country’s critical minerals list. This shift is highlighted by BHP’s decision to temporarily suspend its Nickel West operations and West Musgrave project starting October 2024 due to oversupply, resulting in job redundancies among key mining workers in the state.
Why has Australia failed to capitalise on this opportunity? Nickel extraction methods vary based on ore type and location. In colder regions like Russia, nickel is relatively easy to extract through conventional smelting and refining. In contrast, warmer regions with oxidised and weathered ores present more processing challenges. Technologies such as fire refining and sulfuric acid leaching are used to address these difficulties. Ultimately, Australia has lacked the scale, technology, and funding in the past to really kick off the industry. Now when others have stepped up to fill the gaps, it’s too late.
Ultimately, as a resource-rich country, Australia’s top exports are iron and coal. However, with changing market dynamics and declining demand for traditional mining commodities, Australia's position as a major resource exporter is weakening. Export values for resources and energy have dropped from $466 billion in 2022–23 to an estimated $417 billion in 2023–24. To sustain its export strength, Australia must explore alternative opportunities. Nickel’s success story is not unique; it underscores the need for ongoing investment in innovative technologies and energy methods to ensure a sustainable future. While Australia may have missed the nickel wave, new opportunities will emerge, and the country must be ready to seize them.
References
Resources Victoria. (2023). Nickel. https://resources.vic.gov.au/geology-exploration/minerals/metals/nickel
Pistilli, M. (2024, April 22). Top 9 Nickel-producing Countries. https://www.nasdaq.com/articles/top-9-nickel-producing-countries-updated-2024
Federal Reserve Bank of St. Louis. (2024). Global price of Nickel. https://fred.stlouisfed.org/series/PNICKUSDM
Alternative Fuels Data Centre. (2024). Batteries for Electric Vehicles. U.S. Department of Energy. https://afdc.energy.gov/vehicles/electric-batteries
Wakelin, N. (2023, March 8). How nickel makes electric vehicle batteries better. Nickel Institute. https://nickelinstitute.org/en/blog/2023%E5%B9%B4/march/how-nickel-makes-electric-vehicle-batteries-better/
BHP. (2024, July 11). Western Australia Nickel to temporarily suspend operations. https://www.bhp.com/news/media-centre/releases/2024/07/western-australia-nickel-to-temporarily-suspend-operations
Australian Government. (2024). Resources and energy quarterly: June 2024. https://www.industry.gov.au/publications/resources-and-energy-quarterly-june-2024
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