Member Info for TrickyDicky2

Hi sasa

Well if he is looking around in his own backyard I doubt he'll pick Norilsk with their environmental record. Assuming of course that he'll want to impress with a supply chain that has first class ESG credentials.

TDT

.....getting in on the EV and battery production bandwagon.

https://bellona.org/news/transport/2021-10-russian-government-flirts-with-supporting-electric-cars-in-new-concept

TDT

The below article, from September 2020, predicted Tesla moving over to LFP so it shouldn't have been as big a surprise when announced as it was.

https://cleantechnica.com/2020/09/16/tesla-battery-day-has-elon-musk-already-leaked-the-battery-tech-that-will-give-scale-to-the-ev-revolution/

What you need to do is read the article in full, especially the bit headed "Nickel-cobalt will continue to have an important role for Tesla’s halo/showcase products." This article, together with the recent nickel supply agreement Tesla signed with BHP and Teslas involvement with the nickel operation at Goro in New Caledonia suggests to me they still regard nickel as a critical metal.

Using LFP for their economy range vehicles makes an awful lot of sense. They're cheaper for a start but more importantly it helps prevent a nickel price spike. The only thing nickel shooting off up to the heavens will do is make inevitable a crash back down to earth similar to the one we saw in 2008. On top of that a huge spike in the price of nickel now will only hasten the development of new nickel/cobalt free batteries.

By all means spike when we're producing 50,000 tonnes of nickel pa but not now.

TDT

Asabutchersdog

I think this is what you are referring to.

https://www.reuters.com/article/us-qingdao-metals-ahome-idUSKBN0JW18620141218

TDT

Nthoftheriver

You need to be clear on the cost of the battery as distinct from the cost of the battery pack in an EV. The battery pack costs anywhere between 1/3 to 1/2 the cost of the car depending on the make and the model. A car costing $60,000 will have about 60kg of nickel in its battery pack. That's a battery pack costing $20,000 to $30,000 with 132lbs. of nickel at $9/lb = $1,188, That means the nickel in the battery pack is between 5.94% and 3.96% of the battery pack cost or 1.98% of the cost of the car.

It doesn't take much effort to work out the impact of a $1/lb. increase in the price of nickel on the overall percentage cost of the car/battery pack.

Cheaper cars have smaller batteries and therefore less nickel so the percentages are more or less the same.

The drive (no pun intended) to reduce costs is relentless so movements in the price of nickel will be an issue. The biggest saving in the cost of manufacturing EVs, however, will come from improvements in production. Moving from using nickel sulphate to a nickel powder in the production of the battery cathode is reported to save 7% in the cost of producing the batteries. Wright's Law will also positively impact unit costs the higher volumes go. The price of nickel is only one component in a large complex process.

I think Tesla's adoption of LFP batteries for cars is a short term move. LFP, like NCA and NMC chemistries, have their limits. LFP more or less reached its limit sometime ago. NCA and NMC still have some way to go before they top out.

Using LFP batteries takes the pressure off and givse the nickel mining sector time to catch up.

TDT

Noloss

You might have this web site already. If you don't it's a useful reference for daily draw downs and movements in the nickel price.

https://www.westmetall.com/en/markdaten.php?action=table&field=LME_Ni_cash

The datachart is interesting. It charts stock against price and shows a reasonably good correlation, with a few minor anomalies, between stock levels in the LME and the price of nickel.

TDT

Noloss

That’s interesting because the amounts leaving the LME this month are less than half the daily depletion rates last month. In September stock fell, on average, by about 1,500 tonnes per day. This month, so far, is down to about half of that daily depletion rate.

I think depletion rates have slowed markedly this month over last..

TDT

missionss8

You might want to listen to this presentation from about 8 minutes in.

https://www.youtube.com/watch?v=aLLWmVDtVZ0&t=2001s

Hoffman's comment about "LFP mania" addresses what we are seeing here. Recent improvements in LFP have not been at the energy density level but more to do with cramming more chemicals into the same space. Tesla may have gone all in on LFP for now but for how long? Nickel rich chemistries/batteries continue to evolve and still have someway to go before they reach their energy density limit. That's not the case with LFP.

Hoffman doesn't pull his punches. He predicts nickel rich batteries will be around until at least 2030 if not longer before something better comes along to replace them. Few things in this life are for ever.

TDT

Even the last chicken on Sainsbury’s shelf sells. Eventually.

TDT

max2mentor

Talon Metals is worth looking at becuase they have done what RL has suggested RY should be doing which is present details on the various routes that can be gone down.

https://talonmetals.com/talon-metals-announces-updated-pea-on-the-tamarack-nickel-project-after-tax-npv-increases-96-to-us569-million/

Talon is also interesting becuase, along with BHP and Noront, it shows that interest in early stage nickel projects from the cashed-up is increasing. It might take some time for the spotlight to swing to a project based in the far east of Russia but as everything else gets snapped up it will be one of only a few left.

TDT

pickedpeck

Nickel draw down from the LME is slowing down a bit at the moment. Through out September it was averaging 1,500 tonnes a day. For most days in October that has dropped to, on average, 750 tonnes a day. The reasons? Many and varied.

TDT

You beat me to it Reggie.

https://www.dropbox.com/s/as3l2gr8vtenlac/Screenshot%202021-10-20%20at%2018.17.06.png?dl=0

Nickel now over $21,000/tonne.

TDT

mzx2mentor

Interesting article. Not all car bodies are made from aluminium. I believe the Tesla cyber truck will be stainless steel. Having said that I'm pretty sure this latest supply chain disruption will impact the roll out of EVs.

Of equal interest is the article in your link about Pallinghurst buying 19.2% of Talon Metals for $80m.

TDT

They had this to say about the limonite at Araguaia.

"Horizonte Minerals has announced that the limonite measured and indicated resources at its Araguaia Nickel Project in Brazil are estimated to contain 233,200t of nickel and 25,580t of cobalt. These resources do not form part of the mine schedule, nor the financial model for the rotary kiln electric furnace in the current feasibility study."

I believe there has been some talk about transporting this ore to Vermelho for processing once that project was up and running. I haven't, however, seen anything that states they're planning to do the same with the saprolite at Vermelho going in the other direction. Maybe that's still to come.

The above quote dates from 3rd.Q 2017 and Horizonte had still to tied down the purchase of Vermelho at that point. So I don't know if this bit........

"These resources do not form part of the mine schedule, nor the financial model for the rotary kiln electric furnace in the current feasibility study."

.....is this valid. If it is it means Horizonte has more resource and a potentially longer mine life, bigger NPV and therefore potentially greater FCF.

TDT

Salmonn

You cannot process limonite in an RKEF. Vermelho will need something other than RKEF to process its limonite. Whether that's HPAL or something else remains to be seen.

TDT

Looks like the mainstream media is finally catching on.

https://www.forbes.com/sites/jamesmorris/2021/10/09/electric-vehicles-could-be-the-majority-of-car-sales-as-soon-as-2023/?sh=41cb8b5668b3

This probably helps explain why Tesla hasn't been negatively impacted by the current chip shortage as well.

https://www.youtube.com/watch?v=mRNm00NQI-c&t=336s

TDT

Dave85

I'm sorry for your loss.

TDT

Hi RL

I note your comment:-

“JM has been clear that they are looking for a partner on V, and that is right to my mind before the project progresses to DFS as the sulphate option looked at so far may be changed by a battery partner, so I watch with interest.”

I think most people on here assume the partner is going to be a large miner but from your post it sounds like you think not? Being partnered with a battery manufacturer would make more sense since they will have a much better idea of what they will need going forward. Hoffman did touch on this in the presentation you posted a link to last week. If memory serves me correctly he said new nickel projects should be looking to provide what’s going to be in demand in the future not what’s in demand now. I took that to refer to the significant cost saving in cathode production Tesla and VW are targeting by developing a process that uses a nickel powder and not nickel sulphate.

Partnering at Vermelho is definitely the way to go but whether it’s with a battery manufacturer or a miner or possibly even both remains to be seen.

This is well worth a watch.

https://www.youtube.com/watch?v=RVeqYkGXdQo

It mostly refers to nickel sulphide in the examples quoted but it’s still relevant to laterite projects. It gives you some idea of just how quickly things are moving in the sector.

TDT

Hi pickedpeck

I'm afraid I can't answer that for the simple reason that I don't know. I can't even hazard a guess since there's nothing I can think of to account for the difference, especially the size of the difference. I doubt its got anything to do with transport. If pushed I'd guess at import/export duties.

TDT

Hi mjb606

I stand corrected, it is ferronickel not NPI, that's me being a bit lazy. . The latest McKinsey report, however, puts NPI and Ferronickel on the same price point relatively to LME Class 1 so the 7.5% to 10% discount to the LME Class 1 price point is probably not far off the mark.

https://www.dropbox.com/s/b5o544tms3g46k2/Screenshot%202021-10-15%20at%2012.12.11.png?dl=0

As for a convergence between class 1 and class 2 everything I'm reading suggests the opposite. I have seen a couple of articles recently that suggest the premium nickel sulphate attracts to the price of Class 1 has been converging but not class 1 and class 2. Where have you seen that?

One interesting comment that Ken Hoffman at McKinsey made in a recent interview was miners should be asking EV OEMs what they will need in the future not what they need now. I think he was referring to developments in the cathode production process being pioneered by both Tesla and VW. Instead of using a wet nickel sulphate slurry to make the cathode material they were developing a dry process that required nickel powder. The only thing you need to do is crush Class 1 nickel briquettes to create the powder instead of adding sulphuric acid to Class 1 nickel to create nickel sulphate.

Vermelho is still some way off producing anything so plenty of time so see where this market is going.

TDT