The future of nickel needs to be green. Nickel processing currently contributes to 0.27% of global emissions. With demand coming from the battery sector to fuel the energy transition, supply needs to keep up in terms of carbon and ESG requirements.
In Australia,
nickel mineralisation occurs as both sulphides and laterites. The production of
one tonne of class 1 nickel from sulphide ores emits an average of 10kt of
carbon equivalents, while processing laterites emits 19kt.
Meaning that
production from sulphides automatically have a smaller carbon footprint.
Moreover, Australian miners are switching to renewables rapidly. The largest
operation in the country, BHP’s Nickel West, will be fully powered by solar and
wind by 2024.
The Low
Carbon Mining Landscape
The
Australian government is pledging net zero carbon by 2050, in line with the
requirements of the Paris Agreement. It has also set an interim target of 43%
emissions reduction by 2030 compared to 2005 levels. In 2020, the country emitted
392Mt of carbon from its economic activities.
The government will be restoring
the Climate Change Authority to suggest emissions related policy changes. It is
also implementing the Emissions Reduction Fund to incentivise industrial
emissions reduction. This functions in the same way as a carbon credit trade
scheme. A safeguard mechanism is in place to prevent emissions from exceeding
baseline levels. This scheme applies to companies with Scope 1 emissions of
above 100ktpa.
Over 96% of the
country’s reserve is located in Western Australia. Mining policies are quite
friendly in the country. The government has been granting developing mineral
projects Major Project Status to fast-track developments such as funding
application and permits approvals. This includes Ardea’s Kalgoorlie Nickel
Project, which is being advanced to a Definitive Feasibility Study.
Finished
Nickel Supply
Australia is
forecast to produce 26kt of finished nickel from its refineries in the
September quarter, and 102kt in 2022. Finished supply is then forecast to grow
at a CAGR of 7.5% and reach 146kt in 2027. This will be a result of increased
demand from the battery sector leading to increased high-grade products
production. As large-scale high-grade sulphide projects deplete in the
longer-term, supply is forecast to decrease. By 2040 finished supply is
forecast to be 107kt.
In BHP’s
integrated Nickel West, sulphate production has commenced at Australia’s first
nickel sulphate plant, which began producing in the December quarter of 2021. The
facility will have a nameplate capacity of 100,000tpa of nickel sulphate.
Ore
from Mount Keith, Leinster, Yakabindie, and the satellite mines Cliffs and
Venus, are processed at the Kalgoorlie smelter. Produced matte is then sent to
the Kwinana refinery and processed into class 1 powder and briquettes. The
Kambalda concentrator processes ore from other miners in the region such as
Mincor Resources, with whom BHP has a concentrate offtake agreement.
BHP aims to
reduce Scopes 1, 2 and 3 of its emissions by 30% by 2030 from 2020, and to
achieve carbon neutrality by 2050. In 2021, Nickel West emitted 530kt of Scope
1, and 550kt of Scope 2 emissions from its operated assets.
The company will
source power from the Flat Rocks Wind Farm and the Merredin Solar Farm, which
will fully power the project when they come online in 2024. Total Scope 2
emissions are expected to reduce by 60%. By the end of 2022, over 51k solar
panels will have been installed at Mount Keith, and another 20k at Leinster.

HPALs
There are two
HPALs in the country. One of which is Glencore’s Murrin Murrin project, which
is operated by Glencore’s wholly owned subsidiary Minara Resources. Ore is
sourced from the Goldfields open cut mines and processed into class 1 nickel
and cobalt briquettes.
Glencore is targeting a 50% reduction in total emissions
by 2035, and zero carbon by 2050. In 2021 the company emitted a total of
2,400kt in Scope 1 emissions and 50kt in Scope 2 emissions from its global
nickel operations.
The other
HPAL operation is First Quantum’s 70% owned Ravensthorpe Nickel Operation joint
venture. Laterite ore is mined from three different open pits and processed
into mixed hydroxide precipitates.
First Quantum is aiming for a 50% reduction
in absolute emissions by 2030. In 2021, the Ravensthorpe operation emitted a
total of 167kt in Scope 1 emissions. The recently constructed overland ore
conveying system will further reduce the project’s carbon footprint.
Mined Nickel
Supply
Australia is
forecast to supply 61kt of mined nickel in the September quarter, and 237kt in
2022. An annual growth rate of 3.6% is expected in the medium term, which will
bring nickel in concentrate production to 283kt by 2027. This supply is
expected to continue growing out to 2040, to 462kt.
Mined nickel growth will
come from projects that are currently in the exploration stage, as established
large-scale sulphide projects like Nickel West reach depletion. This list of
new projects includes Lunnon Metals’ Baker Shoot and Raiden Resources’ Mt
Sholl, which have both expanded their project areas by acquiring additional
leases.
IGO has
completed the full acquisition of Western Areas. This adds Cosmos and
Forrestania to IGO’s existing Nova operations. Nickel concentrates are produced
and sold to BHP and Trafigura under offtake agreements. The company is also
developing a new patented process to produce nickel sulphate directly from
sulphide concentrates, this will be less power intensive than the traditional
processing method.
IGO intends
to be carbon neutral as early as 2035. In 2021, a total of 63kt of Scope 1 and
138t of Scope 2 emissions were released from all projects. This includes emissions
from both Nova and IGO’s 30% owned Tropicana Gold Mine nearby. An estimated
6.6kt of carbon have been avoided by the utilisation of the Nova solar farm,
which powers 11% of the project’s total energy consumption. IGO is also
considering the electrification of its mining fleet.
Mincor
Resources has delivered the first load of ore from its Kambalda Nickel
Operations to be processed at BHP’s newly revamped Kambalda concentrator.
Mincor is focusing on ramping up production at both the Cassini and Northern
Operations mining centres.
Mincor also owns the Miitel site, which is an old
nickel mine that produced 2.5Mt of ore at 2.9% nickel from 2000 to 2016. The
project was placed on care and maintenance in February 2016 due to low nickel
prices.
All ore produced from Mincor’s operations will be processed at BHP’s concentrator
and the resultant concentrates will be sold via offtake agreements. In 2021 the
company emitted less than 12kt of Scope 1 and 2 emissions, as its operations
are still ramping up.
The Avebury
mine in Tasmania has finally resumed production after being in suspension for
14 years. Mallee Resources acquired 100% of the project through the
administration of Allegiance Mining. As of August, 18kt of ore have been mined
and stockpiled for when the processing facility comes online.
The company is in
the process of raising A$20-70m (US$13.8-48.4m) in capital to fund operations
restart, processing capacity expansion and further exploration programmes. It
is also considering the purchase of electric mining equipment to replace to
currently diesel-powered ones.

Finding
Nickel
There are
numerous exploration projects scattered around Western Australian. This
includes Poseidon Nickel’s Black Swan, which has just updated its Resource
Estimate to 28.9Mt of ore at 0.63% nickel. The project also has a 2.2Mtpa
processing plant under care and maintenance.
Auroch Minerals has also increased
the Resource Estimate of the Saints project to 991kt of ore at 2.3% nickel. At
the same time, Western Mines continues to progress the Mulga Tank project with
drilling returning significant mineralisation from the Panhandle extension.