The US is currently the fourth largest demand source for finished nickel behind China, Indonesia and Japan. AME currently forecasts finished nickel demand from the world's biggest economy to be 128kt in 2021, a 13% rise from a coronavirus-affected 2020. However, looking forward this is forecast to grow significantly into the longer term on the back of the EV revolution.

As the US is expected to develop further domestic battery production capacity to meet the rising demand from potential growth in domestic EV manufacturing capacity, this will, in turn, drive increasing demand for nickel in the longer term. Given the current size of the EV market, this is a longer-term theme, with nickel demand globally still dominated by stainless steel and alloying sector.

The currently forecast growth in US finished nickel demand is in stark contrast to a recent history of almost terminal decline. The domestic stainless-steel industry in the US followed the wider primary steel industry in increasingly struggling—at times exacerbated by several initiatives pursued by the Trump administration—reaching a nadir with the onset of the coronavirus pandemic induced economic recession. The outlook looks far rosier, with the renewed focus on automotive manufacture in the country, specifically as the major US auto-manufacturers increasingly shift to targeting the EV sector.

The US is currently highly dependent on nickel imports to meet its demand for the material. With demand forecast to grow, and rapidly, attention is turning to securing sources. But what further domestic potential exists?

The USGS reports the country currently only has reserves of 100kt. Lundin Mining own and operate the only current nickel producing mine of note in the US—its Eagle copper-nickel project in the state of Michigan. The mine was purchased from Rio Tinto in 2013 and Lundin accelerated construction to commence production in 2014 with total Reserves (Proven and Probable) of 3.9Mt and 100kt of contained nickel. The project has a total inclusive Resource of 3.8Mt with 113kt of contained nickel.

Is Minnesota the Answer?

Looking forward, a number of potential nickel projects are being evaluated in the north mid-western state of Minnesota. The state is home to the Duluth Complex, a geological formation near the eastern end of the Mesabi Iron Range, which contains one of the world’s largest known undeveloped accumulations of copper, nickel and platinum group metals. Both PolyMet and Twin Metals are progressing projects along the formation.

In the same region Talon Metals is currently exploring the Tamarack Intrusive Complex. The projects are of varying progression with located in the state. Both Twin Metals and PolyMet are more advanced but are both facing legal challenges in their permitting endeavours. Talon Metals’ project is largely still in the exploration phase.

In close proximity to existing downstream processing capacity in Canada, it is likely any Minnesota mine which reaches operation will export intermediates from the US for conversion to finished nickel product for re-import. This is particularly the case given the poly-metallic nature of the potential mines and were largely initiated/pursued as copper plays. Any refining developments would need to be justified assuming the majority of feed is imported.

The identified projects are poly-metallic, with nickel being associated with what were initally targeted as copper sources. This means that if/when these projects are operational, they will still only be making a relatively limited contribution to domestic demand. Further, as previously mentioned, the downstream processing capacity currently doesn’t exist in the US and is likely to see concentrates shipped into Canada for processing before re-importation of finished nickel—assuming the US develops the necessary battery production capacity.

Twin Metals

Twin Metals is a subsidiary of copper giant Antofagasta and is undertaking its namesake project targeting the Maturi deposit within the Duluth Complex. They are focussed on development and operation of an underground copper-nickel-cobalt-platinum group metals mine. The project is in the permitting phase, with a Mine Plan of Operations and Scoping Environmental Assessment submitted in 2019. To be followed by an EIS and public consultation.

The mine plan is for a 25-year 18ktpd mining operation producing nickel in concentrate, as well as copper and cobalt-PGM concentrates. The project has a total Resource of 2,509Mt with 0.17% nickel grade.

PolyMet Mining

PolyMet Mining is undertaking the NorthMet copper-nickel. It has received all major state and federal permits including a Permit to Mine, but a number of its permits have been subject to litigation since 2019. The project has existing infrastructure including rail, roads, utilities and supplier networks from the previous taconite processing plant at the site.

The NorthMet project has a total reported Measured and Indicated Resource of 795Mt. 225Mt is covered by the current mine plan and contains a total 77kt of nickel along with other payable metals.

Talon Metals

Talon Metals are working on development of the Tamarack Nickel-Copper-Cobalt Project in the Tamarack Intrusive Complex—an ultramafic to mafic intrusive complex hosting nickel-copper-cobalt sulphide mineralisation. The project is a joint venture with Rio Tinto (farm-in) and comprises the Tamarack North and Tamarack South projects.

The project is currently only in the exploration stage, with activity confined to the Tamarack North Project, with the Tamarck South region considered project upside. The Tamarack North has a total Indicated Resource of 3.9Mt at 1.91% nickel (0.5% cut-off) and an Inferred Resource of 7.2Mt at 1.11% nickel.

Is that It?

Pretty much.

Problem Solved?

Not exactly. US mined supply is only forecast to annually meet its current quarterly demand—which is forecast to grow. Further, they will struggle to maintain this in the long-term. The above-mentioned projects will currently barely move the dial towards any sort of US self-sufficiency.

With its limited domestic supplies, the US has—and will continue to be—dependent on importing nickel products for both its domestic stainless-steel, other alloying and chemical applications—such as batteries. With the world’s fifth largest producer of both mined and finished nickel products in Canada to its north, the US is in close proximity to a (so far) reliable supply partner.

The US is the destination for nearly half of Canada’s nickel exports, with the country currently supplying ~40% of the US annual finished nickel demand. They are increasingly looking to Australia as a supplementary supply partner.