Global nickel production overview
Nickel plays a pivotal role in modern industry, especially as a key component in stainless steel and batteries for electric vehicles (EVs). In 2024, global nickel production was around 3.0 million metric tons, driven by demand from China and accelerating EV adoption. Indonesia leads the world in nickel output, accounting for over 40% of global supply, followed by the Philippines, Russia, and New Caledonia.
The Indonesian market is divided between class 2 (consumed primarily in the production of stainless steel), and class 1 (battery-grade nickel). Indonesia’s market dominance is primarily in class 2, but Chinese firms’ new investment in Indonesia is making Indonesia battery-grade manufacturing as well.
Geopolitics and climate change become greater drivers in supply dynamics. As Western nations embrace increasing ESG expectations and critical minerals approaches, investors are homing in on nickel producers embracing sustainable sourcing practices and acquiring jurisdiction assets.
Giant nickel mining companies
Largely, conventional nickel mining firms are market leaders in high production volumes, diversified operations, and market position:
Norilsk Nickel (Russia): With a market-leading production base, Norilsk is responsible for about 6% of global nickel supply. Its Russian deposits also position it as a low-cost producer, but political risk exposure has affected investor views.
Vale S.A. (Brazil): Vale operates on an integrated basis, i.e., mining, smelting, and refining, predominantly class 1 nickel. Canadian operations, i.e., Voisey’s Bay, are particularly important to EV supply chains.
BHP Group (Australia): BHP, through its operations at Nickel West in Western Australia, is well-positioned to become a supplier of sustainable battery-grade nickel. Its alliances with Tesla and other automakers attest to its strategic importance.
Glencore (Switzerland): Large diversified mining company with Canadian nickel holdings at Raglan and Sudbury, New Caledonia, and Australia. Glencore’s class 1 nickel exposure and strong trading business make it a leading player in the world market.
Jinchuan Group (China): The world’s and China’s largest nickel-producing conglomerate, even reaching into Africa. Less familiar in Western markets, but as it is, Jinchuan is very important in global supply chains.
These nickel businesses are central to the market and cannot be replaced in following global market flows, which are most evident in the EV-led demand chain.
Newcomers in the nickel market
Juniors and new producers aim to acquire high-grade assets in good quality jurisdictions to meet future demand, primarily the EV market:
Canada Nickel Company (Canada): Its Ontario-based Crawford project is one of the world’s largest undeveloped nickel-sulphide deposits. It is progressing toward permitting and studies on feasibility with a clear ESG strategy.
Talon Metals (USA): Talon, in partnership with Rio Tinto, is working on the Tamarack project in Minnesota, an onshore strategic nickel supplier for the U.S. battery market.
Nickel Industries Ltd. (Australia): Fast-expanding member having direct connections to Chinese battery producers as well as Chinese stainless steel producers. With a list of laterite projects, the company is at the center of Indonesia’s downstream targets.
Premium Nickel Resources (Botswana): Reawakening current nickel deposits on the continent, the firm will provide ethically sourced battery metal to the markets in the West.
These new minning companies for nickel possess high growth prospects but involve financing, project implementation, and regulatory approval risk. Nevertheless, they are becoming more attractive to the OEMs and battery producers in their pursuit of diversified and sustainable supply chains.
Investment prospects and threats
The nickel stocks are gaining increased investor focus because of their coverage in the decarbonisation themes. Investing in them, though, is subject to consideration of jurisdiction risk, commodity cycles, as well as project economics.
Opportunities:
- Increasing demand from EV producers for battery-grade nickel.
- Western lender security programs are able to finance local projects.
- Established suppliers of automakers offer price stability and financial leverage.
Risks
- Geopolitical risk, particularly for firms active in Russia or Indonesia.
- Volatility induced by overproduction or by a demand slowdown.docs
- ESG and permitting issues, most notably for greenfields
Investing in mining stocks for nickel requires attention to cost profiles, the quality of ore (sulfide or laterite), downstream value-adding, and ESG record when determining long-term sustainability.
Techno innovations and sustainability
Nickel is facing transformative change spurred on by tech innovation and inclusions for sustainability, most notably under pressure in battery supply chains.
Applied in upgrading laterite ores to battery-grade nickel, high-pressure acid leach (HPAL) is increasingly in demand in Indonesia for sustainable environments. Such a plant as Papu New Guinea’s Ramu HPAL plant is significant in upgrading class 2 nickels to class 1.
Carbon capture and recycling: Companies such as Canada Nickel are pioneering carbon-neutral mining using carbonation of tailings and utilization of renewable energy, in accordance with global decarbonization.
Digitalization and automation: Vale and BHP are using AI, autonomous fleets, and predictive maintenance to lower costs and maximize safety, establishing new standards for operations.
TCFD- and ESG-based reporting: Pressure from stakeholders was the catalyst driving more TCFD and GRI framework adoptions across mainly listed nickel firms.
Such initiatives change the business model of nickel companies and are investment-worthy. Companies in the technology adoption curve and disclosure leadership position are most suited to position themselves to gain capital and long-term contracts.
Future direction of the nickel market
The nickel market is where the transition in energy and geopolitical realignment intersect. The demand for electric vehicles will quintuple in 2030, primarily backed by high-purity class 1 nickel for lithium battery cell applications.
Near-term Indonesian surpluses and replacement through various chemistries (e.g., LFP batteries) would, however, moderate price increases. The long-term North American and European Class 1 nickel deficits would also drive strategic investment and M&A for nickel mining businesses.
Localization and sustainability of supply chains will be the deciding factors. Low-carbon footprint, good governance, and Australian or North American project firms are likely to be relevant for the long haul.
FAQ
Who is the largest nickel mining company?
Russia’s largest-volume producer in 2024 is Norilsk Nickel, but the world’s largest is Chinese company Tsingshan. Despite regional risk issues, Norilsk produces in excess of 200,000 metric tons each year and accounts for about 6% of global production. Vertically integrated production allows for material cost advantages, but regional risk issues impact investor sentiment.
What are the big 4 mining companies?
What are the big 4 mining companies?
The “Big 4” mining operations usually include BHP, Rio Tinto, Glencore, and Vale. They operate in various commodities, including nickel. Vale and BHP are among the largest nickel portfolio operators of vertically integrated supply chains with a focus on manufacturing battery-grade products.
Is nickel a good investment?
Nickel presents a promising long-term investment opportunity, particularly in light of its central role in stainless steel manufacturing and battery manufacturing in electric vehicles. However, nickel is not price erratic and geopolitically volatile. Investors should therefore consider nickel equities with class 1 asset exposure, ESG integration, and strong balance sheets.
Is nickel mining profitable?
Nickel mining is very profitable, especially for lowest cost producers, particularly those having access to high grade sulfide deposits. The companies such as Norilsk Nickel and Vale possess healthy profit margins. Nevertheless, laterite operations, particularly those involving the use of HPAL technology, incur higher capital cost and risk in operations, which affects profitability subject to market phases.
Leave a Reply