This set of criteria rests on three pillars, with the ‘Environment’ component including aspects such as an operation’s energy consumption, waste management, and disturbance to the local ecosystem. The ‘Social‘ aspect will relates to a corporation’s relationships with its employees, local communities and business partners. Finally, ‘Governance’ focuses on the accuracy and transparency of a company’s accounting and reporting methods.

Out of these, the environmental pillar is gaining particular focus in the mining industry, particularly with many major companies targeting net zero carbon by 2050. A company’s carbon intensity is measured by the emissions associated with its mining and processing operations, including available offsets. Companies are under pressure to outline the concrete actions they plan to make to meet their net zero commitments.

For instance, with its aim to halve emissions by the end of this decade, Rio Tinto has led a team of experts to study the possibility of carbon storage at the Tamarack joint venture project in Minnesota, the same site that has signed a six-year agreement with Tesla to supply sustainably mined nickel. Meanwhile, in February 2021, BHP signed an agreement with the Merredin Solar Farm to supply 50% of the electricity required for its operations at the Kwinana Refinery. In July 2021, Nornickel announced that it had shipped its first batch of carbon-neutral nickel cathodes from its Kola Division, as the facility now mainly relies on an upgraded hydroelectric plant.

The Big Picture

Nickel deposits are commonly found in low-grade ores (~1-3% nickel), which makes the metal highly energy-intensive to extract and refine. Consequently, nickel production causes significant carbon emissions due to its use of large amounts of energy predominantly sourced from fossil fuels.

In a study conducted in 2014, nickel was ranked as the metal with the ninth-highest global warming potential, based on production levels data from 2008. Global nickel production came to 1.57Mt in 2008 and has since grown to an estimated 2.5Mt in 2020. This trend is expected to continue as global demand for nickel continues to rise.

Nickel is extracted from two types of ores, namely laterite and sulphide ores. In 2020, the United States Geological Survey (USGS) reported that the world’s identified nickel resources consist of 60% laterite ores and 40% sulphide ores. While the majority of the identified nickel resources are contained in laterite ores, historical, nickel has predominantly been produced from sulphide ores.

This is mainly due to the challenges of the more complex processing required for laterite ores compared to sulphide ores. However, to meet the growing demand for nickel, an increasing amount of nickel is being sourced from laterite ores, which leads to increasing energy costs and CO2 emissions for nickel production.

Since 1999, the Nickel Institute has been monitoring its member companies’ carbon footprints, and it was noted that the overall volume of emissions has reduced by 9% over the years. It was also noted that, in 2019, nickel production was responsible for 0.27% of global greenhouse gas emissions.

Emission Scopes

When reporting carbon emissions, many countries and companies have adopted greenhouse gases (GHG) emission standards as outlined by the Greenhouse Gas Protocol. The protocol classifies emissions across three scopes:

Scope 1: Direct emissions –released as a direct result of an activity at company level, such as fuel combustion from vehicles and machines.

Scope 2: Indirect emissions –released from the indirect consumption of an energy commodity by the company (typically electricity).

Scope 3:  Additional indirect emissions –from consumers utilising company output, generated in the wider economy.

Production Breakdown

GHG emissions are measured in carbon dioxide equivalent, or CO2eq, and the method of nickel production can drastically alter the volume of emissions produced. As of 2021, the production of one tonne of class 1 nickel generates an average of 10t CO2eq from sulphide ore, 19t CO2eq from laterite ore via HPAL, and 59t CO2eq from laterite ore into nickel pig iron (NPI) and then nickel matte.

In 2020, production of 1t of nickel metal was linked to average emissions of 13t CO2eq. Approximately 60% of emissions are associated scope 1 emissions, another 15% are scope 2 emissions, and the remaining 25% are mainly associated with process chemicals used during the productions process (scope 3 emissions).

Furthermore, the production of nickel pig iron emits a staggering 69t CO2eq per 1t of nickel content. According to Canadian Sudbury, nickel pig iron could be branded as "dirty nickel" since the production process is not environmentally friendly, it is highly carbon-intensive.

Meanwhile, ferronickel production creates 45t CO2eq per 1t of nickel content. The primary extraction stage accounts for 87% of the total CO2 emissions related to ferronickel production. Roughly 72% of the CO2 emissions are scope 1 emissions, another 17% are scope 2 emissions, and the remaining 11% are scope 3 emissions.

The production of 1t of nickel sulphate emits a further 5.4t CO2eq. The main stages of nickel sulphate production where CO2 emissions occur are primary extraction and refining, which account for 42% and 35% of the total CO2 emissions related to the production process, respectively. Overall, 67% of the CO2 emissions are scope 1 emissions, another 7% are scope 2 emissions, and the remaining 26% are scope 3 emissions.

A processing method that has become increasingly popular is the high-pressure acid leach (HPAL) method, as it is effective in extracting from nickel laterite ores of lower grades, and is even capable of converting the product into class 1 nickel. It also has a high cobalt recovery, meaning that the by-products generated are more valuable than those of other processes.

However, the HPAL process is extremely energy-intensive. Many of the current HPAL plants use coal as their source of electricity, and three times more greenhouse gases are emitted during the process than during extraction from sulphide ores. Moreover, the low pH and high pressure levels required for the process mean that the equipment itself is rapidly corroded over time and needs constant maintenance, increasing the costs and waste associated with the process.

Despite the significant carbon emissions resulting from nickel production, the essential metal is not easily replaced. Moreover, while nickel production itself is energy intensive, the metal finds its way into a wide range of applications through which it significantly reduces carbon emissions.

For instance, regarding its usage in EV batteries, it is reported that replacing gasoline vehicles with EVs reduces overall carbon emissions by 51% over the life of the car. Another example is nickel-containing stainless steel, in which nickel enhances corrosion resistance, significantly increasing the product’s life, which limits the demand for manufacturing.

A Bright Path Ahead

With that said, the demand for ‘green’ nickel production is high. Both miners and EV companies are increasingly mindful of the interest in green-compliant battery materials and are increasingly hesitant to invest in projects powered by coal. Tesla, for instance, has made its stand publicly by appealing to nickel producers to immediately start producing as much “green, efficient, and sustainable nickel as possible”.

Chinese steel and nickel producer Tsingshan has vowed to be greener in its production. The company has recently announced plans to build 2,000MW clean-energy facilities at both its Morowali Industrial Park (IMIP) and Weda Bay Industrial Park (IWIP) hubs in Indonesia over the next 3-5 years, including solar and wind power stations and supporting infrastructure. Tsingshan also has plans to build a 5,000MW hydropower project in Indonesia to further clean up its energy supplies.

Nornickel also claims to have reduced its use of coal-fired energy by 49%. In 2016, the company decommissioned its Norilsk nickel factory, and it aims to reduce emissions on the Kola peninsula by 85% by the end of 2021 as part of its global strategy of transforming into an environmentally friendly company.

The company also invests in energy modernisation facilities, including the replacement of hydroelectric units at the Ust-Khantaiskaya hydro power plant. The share of renewable sources in the company’s energy mix has thus increased to 55% for the Norilsk Industrial District and 46% for the group.