At Terrafame's mine in Finnish Sotkamo, several employees hope that the booming electric car industry could increase the demand for nickel. For example, Tesla's electric battery contains 80 percent nickel. A silvery-white metal, the chemical element of atomic number 28.
The amount of electric cars is increasing and the market is expected to grow sharply soon. This means that demand for substances in car batteries, including nickel, also increases.
The nickel price has declined steadily in recent years, but many analysts now expect that the price will go up, possibly faster than imagined.
The reason for this is the increased popularity of electric cars. Nickel, along with lithium, cobalt and manganese, is an important component of electric cars' batteries. For example, the cathode - one of the poles in a battery - in the car manufacturer Teslas electric cars is 80 percent nickel. A Teslile is estimated to contain 63 kilos of nickel.
Many nickel producers hope again after many difficult years. In Finland, nickel is produced in Terrafame's mine in Sotkamo, formerly called Talvivaara. The company's CEO Joni Lukkaroinen sees a good market niche in producing nickel for just car batteries. So far, however, a superior part of the mining nickel goes to the production of stainless steel.
- Today, about 70 percent of global nickel production is used for the production of stainless steel. Demand is increasing. Approximately 5 percent of the nickel is currently being used for car batteries, but according to market analysts, this figure can rise to 20 percent within ten years. The increase, apart from increased demand for electric cars, is also due to the fact that car batteries are expected to develop in a direction where the amount of nickel in the batteries is rising, says Lukkaroinen.
In addition to nickel, Terrafame also produces cobalt, and according to Lukkaroinen, the increased demand for electric and hybrid cars also reflects the development within cobalt market.
- Almost half of all cobalt produced in the world is used in batteries. We produce a mixture of nickel and cobalt that is suitable for further processing in the automotive battery industry. We are interested, for example, in more development work with car battery manufacturers. I see it as a good thing that the use of high-grade nickel and cobalt increases.
The world's largest nickel producers are Philippines and Indonesia. In recent years, both countries shaked the world market by closing down nickel mines or by restricting exports.
After a few difficult years for Indonesia's economy, the total ban was lifted in January this year. This again caused the nickel price to be significantly below the price before 2014.
The world's largest nickel producer, the Philippines, in turn closed over half of the country's nickel mines in February this year. The reasons were environmental - the mining has caused major environmental problems in the country. Later this ban has also been mitigated and now eight of the over 20 mines can export nickel from their warehouses.
On the world market, Finland is a small player with a nickel production of almost 10,000 kilograms in a year, although nickel degradation in Finland can accelerate in the coming years.
- Finland's good infrastructure, including electrified rail networks and modern port services, supports the entire mining industry.
Another thing that could play in the hands of Finland is if Tesla decides to build a giant so-called "gigafabrik" in Ostrobothnia. The company has planned to build a battery factory somewhere in Europe and Vaasa has come up as an alternative because the city is located near several raw materials: Nickel is produced in Sotkamo and Harjavalta in Satakunta while cobalt is produced in Karleby. Lithium production will also begin in Karleby.
- If we get Tesla's battery factory to Finland, it certainly intensifies the discussion of a local commodity producer, that is, us. We are following an interest in the nature of the factory project, says Lukkaroinen.
Source. HBL
