Nickel Laterite's Integral Role in the Coming Nickel Boom - Part 2
Kitco Commentaries | Opinions, Ideas and Markets Talk
Featuring views and opinions written by market professionals, not staff journalists.
In Part 1, I reviewed the potential demand side fundamentals of the EV revolution and how it affects the nickel market. Additionally, I explained the key differences between the 2 main types of nickel deposits – sulphides and laterites.
With this knowledge, we can now explore the 2 most common nickel laterite processing techniques and how HPAL, in particular, could be used on a grander scale to feed the burgeoning EV battery market.
First, let’s recap the differences between sulphide and laterite deposits.
Sulphide Versus Laterite Deposits
A summary of the key differences between the 2 types of deposits:
As you can see, there are advantages and disadvantages to each type of ore. Currently, the sulphide ore mainly feeds class 1 nickel users, and the laterite ores mainly feed the stainless steel industry (which, by the way, currently accounts for 2/3 of the global nickel demand).
Nickel Laterite Ore Processing
Nickel laterite ore processing depends on the zone from which the ore is mined. As outlined earlier, each zone within a laterite deposit is very different in its chemical composition and, therefore, restricts the processing technique that can be used to extract the nickel.
Arguably the most well known and widely used processing technique for extracting payable metals is smelting. The smelting of nickel laterite ore is no different, as the smelting process is the dominant technique and is typically used to make nickel pig iron (NPI) for the Chinese stainless steel market.
NPI is created by mixing, saprolite ores with coking coal and a mixture of fluxes. The process culminates in an electric arc or blast furnace, which renders the unwanted impurities into slag and allows the molten mixture to be cast into molds, forming nickel pig iron.
The main advantage of the smelting process is that it is a proven technology and can process saprolite ores (high magnesium), in relative terms, quickly. As well, it has high nickel recoveries. The smelting process, however, it requires a higher grade laterite ore, a large amount of energy to operate, and finally, doesn’t separate cobalt in the process.
Hydro-metallurgical processing of nickel laterite ores can produce either a pure metal or an intermediate product such as mixed hydroxide precipate (MHP), mixed sulphide precipate, nickel carbonate or mixed nickel oxide.
The production of pure metals comes at a higher cost, as it requires additional facilities for purification, cobalt separation, and electro-winning – which can be expensive from an energy perspective. Alternatively, the production of intermediate products can be advantageous for all the opposite reasons that make pure metals less cost effective – less CAPEX and less energy intense.
The future of the hydro-metallurgical processing is most likely in high pressure acid leaching (HPAL), which has its own pros and cons, but has been gaining popularity in the last few years.
High Pressure Acid Leaching (HPAL)
The HPAL process’ re-emergence on the world stage as a technique for processing laterite ore is gradually gaining popularity as companies have begun to realize the need for laterites to be processed into Class 1 nickel units. Unfortunately, while the HPAL process is gaining more attention, it's only really effective at processing the low magnesium limonite ore, as high magnesium levels have a neutralizing affect on the sulfuric acid which plays a key role in the extraction of the payable metals in the process.
The HPAL processing begins with the crushing of the ore, which is then mixed with water and preheated before being placed into an autoclave. The autoclave then elevates the temperature (up to 255 degrees Celsius) and pressure (725 psi) of the slurry and sulfuric acid and, over the next 60 minutes, the mixture reacts, extracting the nickel and cobalt from the slurry.
Once the autoclave portion of the HPAL process is completed, the slurry must be brought back down to atmospheric pressure and, thus, requires at least a couple of pressure letdown stages, which reduces the overall pressure of the slurry. Once at atmospheric pressure, it can be washed and the nickel / cobalt separated from the liquid.
Overall, the main advantages of the HPAL process are its ability to process low grade nickel laterite ores and its high and separate recoveries of nickel and cobalt. These advantages, however, are contrasted by a few negatives, which are its inability to process high magnesium or saprolitic ores, high construction and maintenance costs due to the highly corrosive sulfuric acid and, finally, the proper disposal of the magnesium sulphate effluent (waste).
NOTE: There are a few other types of nickel laterite processing techniques that are used throughout the world, such as, Caron Processing, Pressure Acid Leaching (PAL), atmospheric leaching, and bioleaching.
Global Nickel Refinement
The following flow chart produced by UBS Research is a great depiction of how the current nickel supply is consumed. It's my contention that the 10% of nickel laterite consumption, which is currently diverted to create nickel chemicals and metal, will increase over time and fulfill the Class 1 nickel demand, which I believe will outpace sulphide ore production.
Source: UBS Research
The EV revolution is here and, to me, it's not a matter of 'if' but at what rate will the global population adopt EVs into their lives. As a result, all of the battery metal markets will be affected, each in its own way. The metal that I believe will play the largest role in this revolution is nickel.
This future onslaught of demand will be fulfilled by nickel laterites, which, today, have a minimal role in the Class 1 nickel market. In my opinion, the drop in nickel sulphide production, exploration and development over the coming years will force battery makers to consume nickel produced from the HPAL processing of laterite ores.
This, in turn, will have to be met with a rise in nickel prices to allow for these low grade laterite ores to be cost effectively processed for their use within the battery market.
Ultimately, I believe the future is very bright for nickel, but don’t get too caught up in the narrative; as I've shown, there are other ways the market can change to accommodate this major influx of demand.
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Until next time,