The news that set back a nickel revival
Last month nickel prices looked like they may break to a level that would support new mine development, but news out of Indonesia ended the rally, said Ken Hoffman, Co-Leader EV Battery Materials Group at McKinsey.
On Thursday Hoffman joined editor Neils Christensen, Kitco correspondent Paul Harris and mining audiences manager Michael McCrae to record a podcast.
With electric vehicles coming to the fore with government incentives and broad consumer acceptance, more batteries are going to be needed, and nickel is turning out to be a key battery metal. However, supply is limited.
The recent rise in nickel prices may have started to trigger new mine development, but news from China’s Tsingshan Holding Group stopped the rally.
In early March, news that Chinese stainless steel and nickel giant Tsingshan's decision to produce a large amount of nickel matte in Indonesia eased concerns over battery-grade supply, according to a report by Reuters.
In February nickel hit its highest level since 2014, $20,110 a tonne. According to Reuters, Tsingshan said on Wednesday it would supply 100,000 tonnes of nickel matte - an intermediate product that can be used to make both stainless steel and battery-grade nickel for electric vehicles (EVs) - to Huayou Cobalt and CNGR Advanced Material within a year from October.
Nickel prices subsequently tumbled. Hoffman said nickel prices need to be higher for mine development to proceed.
"I do think that we have to get the price of nickel higher. It's a shame if Indonesia does not come through with this new process. It's really delayed the price point of nickel to get new projects, because most nickel miners want something in the twenties before they get comfortable making massive investment," said Hoffman.
"The fact that it's fallen down...is a bit disappointing, because it just delays that investment decision."
As of today, the cash nickel price on the LME is $16,001 a tonne.
The podcast also reprised its conversation with Frank Giustra, CEO of Fiore Group, who has challenged Michael Saylor, CEO of MicroStrategy, to a public debate on gold versus Bitcoin.
Giustra told Kitco News that his intent is to help Saylor clarify some of the things he’s said publicly about gold and challenge Saylor’s thesis.
“I am not a Bitcoin hater. I just think that [Saylor’s] thesis on gold and Bitcoin needs to be explored and I think I would love the opportunity to explore some of the statements that he’s making on some of these interviews [that he’s done],” Giustra said.