Blackstone Minerals Limited ("Blackstone" or the "Company") is pleased to provide results from the final infill drill program at the Ban Phuc DSS deposit at its Ta Khoa Nickel – CopperPGE Project in Northern Vietnam. (refer Figure 1, Table 1, Table 2 & Appendix 1).
Current reporting includes some of the best broad DSS intersections at Ban Phuc:
Blackstone Minerals' Managing Director Scott Williamson commented:
"The high tenor of results from the final infill drilling program increases the confidence of the resource at Ban Phuc, and the mine plan that will underpin Blackstone's UBU PFS. In the relatively short amount of time since acquiring the Ta Khoa Nickel – Copper – PGE Project, Blackstone has been able to define a large, disseminated sulfide deposit which considerably adds to the security of supply for the Company's vertically integrated downstream refinery."
Blackstone Minerals is well-positioned to leverage a projected nickel supply deficit as it strives to become a vertically integrated producer of low-cost, low-carbon, battery-grade nickel. Key to this is Blackstone’s Ta Khoa project in Vietnam, an emerging hub for the electric vehicle market.
As the world moves closer to a sustainable net-zero future, the need for battery metals continues to mount and nickel may soon be among the metals to see a supply crunch. Though its roots are in the stainless steel sector, it's also a critical component of lithium-ion batteries.
Given that many nations are aiming to replace combustion vehicles with electric cars by 2030, the metal is already experiencing a massive spike in demand. Benchmark Minerals expects the need for battery-grade nickel will increase about 950 percent by 2040.
It's imperative to ramp up global nickel production but the resource sector, for its part, must do so with a much-reduced carbon footprint to influence the sustainability of the entire value chain. Blackstone Minerals (ASX:BSX,OTC:BLSTF,FRA:B9S) recognizes this. As a vertically integrated producer of low-cost, low-carbon nickel, the company aims to become a leading source of low CO2 emission nickel sulphide. Its flagship Ta Khoa project in Vietnam is representative of that goal.
Blackstone Minerals business structure schematic
With over 20 active mines and a burgeoning technology sector, Vietnam is on the road to becoming a hub of electric vehicle production and innovation, with low labor costs and regulated electricity pricing further driving its growth. Steadily increasing foreign direct investment in the region is indicative of this as the country seeks to attract $50 billion in new foreign investment by 2030.
Blackstone is uniquely positioned to take advantage of this, thanks to two factors. US President Joe Biden's Inflation Reduction Act, which came into force in August 2022, represents the largest investment into climate action in United States history. A similar initiative is rolling out in the European Union (EU), which maintains a Free Trade Agreement with Vietnam — something multiple partners of the company have expressed interest in.
Blackstone's Ta Khoa Project consists of two streams, the Ta Khoa Nickel Mine and the Ta Khoa Refinery. Recent milestones point to Blackstone’s commitment to advancing this game-changing project.
These milestones include a memorandum of understanding with Cavico Laos Mining to collaborate in a number of areas associated with CLM’s nickel mine in Lao People's Democratic Republic and supply of nickel products for Blackstone’s Ta Khoa Refinery in Vietnam.
Blackstone also partnered with Arca Climate Technologies to further investigate the carbon capture potential at the Ta Khoa Project through carbon mineralisation, and explore opportunities to utilise Arca’s carbon capture technologies within the project.
In a bid to collaborate on the supply of renewable wind energy to the Ta Khoa Project, Blackstone signed a direct power purchase agreement with Limes Renewables Energy.
Blackstone received AU$2.8 million as an advance from a research & development (R&D) lending fund backed by Asymmetric Innovation Finance and Fiftyone Capital. The advanced payment reflects the significant investment by Blackstone to develop the Ta Khoa Refinery process and Blackstone’s unique strategy to convert nickel concentrate blends into battery products in the form of precursor cathode active material (pCAM).
In December 2023, Blackstone entered into an option agreement with CaNickel Mining to acquire the Wabowden nickel projectlocated in the world-class Thompson Nickel Belt in Manitoba, Canada.
The Wabowden project will have the potential to fill the Ta Khoa Refinery, removing dependence on third party feed sources.
The company has signed a non-binding MOU with the Development for Resources Environmental Technology joint stock company (DRET) to investigate opportunities to repurpose and trade waste material (or residue) from the Ta Khoa Refinery into construction material products. Moreover, it has also progressed the Ta Khoa Refinery byproduct offtake strategy with Vietnam Chemical Group (VinaChem), PV Chemical and Equipment Corporation (PVChem) and Nam Phong Green Joint Stock Company (Nam Phong) to sell Ta Khoa Refinery byproducts, being manganese sulphate (or epsomite) and sodium sulphate.
As the company plans to build a global nickel business, Blackstone signed a non-binding memorandum of understanding with Yulho Co. Ltd (Yulho) and EN Plus Co. Ltd (EN Plus) to establish a collaboration across the businesses including EN Plus and Yulho who are in joint venture on the Ntaka Hill nickel sulphide project in Tanzania, and the Dinagat Island nickel laterite project in the Philippines.
Blackstone holds a 90 percent interest in the Ta Khoa Nickel-Copper-PGE Project, located 160 kilometers west of Hanoi in the Son La Province of Vietnam. It includes an existing modern nickel mine built to Australian Standards, which is currently under care and maintenance. The Ban Phuc nickel mine successfully operated as a mechanized underground nickel mine from 2013 to 2016.
Blackstone intends to complement the existing mine through the installation of a large concentrator, refinery and precursor facility, supporting integrated on-site production of nickel, cobalt and manganese precursor products for the Asia-Pacific market. One of Blackstone's key Research and Development objectives with Ta Khoa is to develop a flowsheet that will support this production.
To fulfill this goal, Blackstone is focusing on a partnership model, collaborating with groups committed to sustainable mining. It is also working to minimize its carbon footprint and implement a vertically integrated supply chain.
Hamish Halliday is a geologist with over 20 years of corporate and technical experience. He is also the founder of Adamus Resources Limited, an AU$3 million float that became a multimillion-ounce emerging gold producer.
Scott Williamson is a mining engineer with a commerce degree from the West Australian School of Mines and Curtin University. He has over 10 years of experience in technical and corporate roles in the mining and finance sectors.
Dr. Frank Bierlein is a geologist with 30 years of technical and corporate experience, focusing on grassroots to mine-stage mineral exploration, target generation, project management and oversight, due diligence studies, mineral prospectivity analysis, metallogenic framework studies and mineral resources market and investment analysis.
Alison Gaines has over 20 years of experience as a director in Australia and internationally. She has experience in the roles of board chair and board committee chair, particularly remuneration and nomination and governance committees. She is also the managing director of Gaines Advisory P/L and was recently global CEO of international search and board consulting firm Gerard Daniels, with a significant mining and energy practice.
Gaines has a Bachelor of Laws and a Bachelor of Arts (hons) from the University of Western Australia, a Graduate Diploma in Legal Practice from Australian National University and an honorary doctorate of the University and Master of Arts (Public Policy) from Murdoch University. She is a fellow of the Australian Institute of Company Directors and holds the INSEAD certificate in corporate governance. She is currently the governor of the College of Law Ltd, and non-executive director of Tura New Music.
Daniel Lougher’s career spans more than 40 years involving a range of exploration, feasibility, development, operations and corporate roles with Australian and international mining companies including a period of eighteen years spent in Africa with BHP Billiton, Impala Plats, Anglo American and Genmin. He was the managing director and chief executive officer of the successful Australian nickel miner Western Areas Ltd until its takeover by Independence Group.
Lougher also holds a first class mine manager’s certificate of competency (WA) and is a fellow of the Australasian Institute of Mining and Metallurgy (AusIMM). Lougher is the chair of the company’s technical committee and nomination committee.
Jamie Byrde has over 16 year's experience in corporate advisory, public and private company management since commencing his career with big four and mid-tier chartered accounting firms positions. Byrde specializes in financial management, ASX and ASIC compliance and corporate governance of mineral and resource focused public companies. He is also currently company secretary for Venture Minerals Limited.
Tessa Kutscher is an executive with more than 20 years of experience in working with C-Level executive teams in the fields of business strategy, business planning/optimisation and change management. After starting her career in Germany, she has worked internationally across different industries, such as mining, finance, tourism and tertiary education.
Kutscher holds a master’s degree in literature, linguistics and political science from the University of Bonn, Germany and a master’s degree in teaching from Ludwig Maximilian University of Munich.
Andrew Strickland is an experienced study and project manager, a fellow of the Australian Institute of Mining and Metallurgy, University of WA MBA graduate, with undergraduate degrees in chemical engineering and extractive metallurgy from Curtin and WASM.
Before joining Blackstone, Strickland was a senior study manager for GR Engineering Services where he was responsible for delivering a series of scoping, PFS and DFS studies for both Australian and international projects. Over his career, he has held a variety of project development roles across both junior to mid-tier developers (including Straits Resources, Perseus Mining and Tiger Resources) and major multi-operation producers (South32).
Graham Rigo is an experienced study manager with over a decade of on-site production experience, holding undergraduate degrees in chemical engineering and finance from Curtin University, WA.
Before joining Blackstone, Rigo was a study manager for Ausenco where he was responsible for delivering a series of scoping, PFS and DFS studies for both Australian and international projects over a range of different commodities.
Rigo has over 11 years of site experience in nickel and cobalt hydromet production experience, in supervisory/superintendent level roles as well as process engineer experience.
Lon Taranaki is an international mining professional with over 25 years of extensive experience in all aspects of resources and mining, feasibility, development and operations. Taranaki is a qualified process engineer from the University of Queensland Australia. He holds a Master of Business Administration, and is a fellow of the Australian Institute of Company Directors. Taranaki has established his career in Asia where he has successfully worked (and lived) across multiple jurisdictions and commodities ranging from technical, mine management and executive management roles.
Prior to joining Blackstone in February 2022, Taranaki was the chief executive officer of Minegenco, a renewable-energy-focused independent power producer. Preceding this, he was managing director of his private consultancy, AMG Mining Global, where he was providing services to the mining industry in Singapore, Guyana, Indonesia and Cambodia. Additionally, Taranaki has held various senior positions with Sakari Resources, PTT Asia Pacific Mining, Straits Resources, Sedgmans and BHP Coal.
Blackstone Minerals (ASX: BSX) is pleased to announce that the Company will be presenting at Red Cloud's Pre-PDAC 2023 Mining Showcase. We invite our shareholders and all interested parties to join us.
The annual conference will take place in-person at the Sheraton Centre Toronto Hotel from March 2-3, 2023.
Andrew Strickland, Executive, BD will be presenting on March 2nd at 3:30PM Eastern Standard time.
For more information and/or to register for the conference please visit: https://redcloudfs.com/prepdac2023/.
We look forward to seeing you there.
About Blackstone Minerals
Blackstone Minerals Limited is an Australian based battery materials developer. The Company is focused on building an integrated upstream and downstream battery metals processing business in Vietnam that produces Nickel-Cobalt-Manganese (NCM) Precursor products for Asia's growing Lithium-ion battery industry. The Company's projects include Ta Khoa Nickel Project, Ta Khoa Refinery and Gold Bridge Project. It owns a 90% interest in Ta Khoa, which is located approximately 160 kilometers west of Hanoi in the Son La Province of Vietnam. The Ta Khoa Refinery is designed to have a refining capacity of 400 kilotons-per-annum (ktpa), with feedstock provided from a combination of concentrate from the Ta Khoa Nickel Project and third-party feed sources. The Gold Bridge Project covers approximately 367 square kilometers of tenure and is located 180 kilometers north of Vancouver in British Columbia, Canada.
For further information:
Blackstone Minerals
Ashleigh Fox
Executive Assistant
+61407 320 079
ashleigh@blackstoneminerals.com.au
News Provided by Newsfile via QuoteMedia
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Under the Entitlement Offer, eligible shareholders were invited to subscribe for one (1) New Share for every four (4) existing Shares held at an offer price of $0.03 per share.
The Company has now closed the retail component of the Entitlement Offer with applications totalling 2,767,788 shares including additional acceptances to be issued at $0.03 on top of the 18,650,023 shares issued under the institutional component of the Entitlement Offer on 15 November 2024. In accordance with the timetable, the New Shares will be issued on or before 4 December 2024.
The retail component of the Entitlement Offer is partially underwritten by Nanjia Capital Limited “(Nanjia”) for the amount of approximately $1.09m. Accordingly, Nanjia will now subscribe for 36,349,900 New Shares in accordance with the underwriting arrangements summarised in section 7.4(b) of the Prospectus and the Company expects to finalise this process within the next week.
Shortfall Share Placement
A total of 74,946,591 New Shares were not taken up under the Entitlement Offer by eligible securityholders or issued to Nanjia as underwriter (“Shortfall Shares’”) The directors will work with the lead manager to the Entitlement Offer and the major shareholders to place the shortfall within three (3) months of the closing date, subject to requirements of the ASX Listing Rules and Corporations Act 20021 (Cth) continuing to be met. Please refer to the Prospectus dated 4 November 2024 for further details on the issue of the shortfall.
Click here for the full ASX Release
This article includes content from Blackstone Minerals, licensed for the purpose of publishing on Investing News Australia. This article does not constitute financial product advice. It is your responsibility to perform proper due diligence before acting upon any information provided here. Please refer to our full disclaimer here.
As FPX Nickel strengthens its position in the critical metals space, investors seeking exposure to the green energy transition may find FPX Nickel an intriguing prospect, given its potential to become a low-cost, environmentally responsible nickel producer in a stable jurisdiction.
FPX Nickel (TSXV:FPX,OTXQB:FPOCF) is an exploration and development company focused on its advanced-development-stage Tier 1 Baptiste project in the Decar Nickel District in central British Columbia. The project has the potential to supply high-concentration nickel and cobalt sulfates suitable for the growing electric vehicle battery industry, as well as more traditional markets for nickel, such as stainless steel.
Nickel plays a vital role in electric vehicle (EV) and battery manufacturing, a sector that sees rapid expansion year after year. Market research projects a growing nickel demand for EVs to reach 1.3 million metric tonnes per annum by 2030, as nickel content in electric vehicles increases to over 40 kilograms per car battery.
Despite its significant role in powering a global shift to greener energies, analysts also project an undersupply of nickel for the next several years due to decreasing production and a lack of new active mines. Mining companies advancing high-margin nickel projects offer investors exposure to a market with great economic growth and success potential.
FPX Nickel’s Baptiste project leverages a 2023 preliminary feasibility study( PFS) and an updated mineral resource estimate that includes total nickel and potential by-product elements, cobalt and iron.
The PFS for Baptiste indicated an after-tax NPV of $2.01 billion and an IRR of 18.6 percent at $8.75-pound nickel for a 29-year mine life producing an average of 59,100 tonnes of nickel per year.
The positive geological interpretation of the Van target at the Decar Nickel District offers further blue-sky potential for the Baptiste project, potentially mimicking the successes of its geographic neighbors in central British Columbia, such as Artemis Gold’s C$1.8 billion Blackwater Gold open-pit project.
The Baptiste project presents FPX Nickel with the potential to produce nickel at a significantly lower carbon footprint than other sources of production in the global nickel industry. Recent leach testing of awaruite nickel concentrates produced from Baptiste achieved nickel recoveries of 98.8 percent to 99.5 percent in producing a high-purity chemical solution containing 69.4 to 70.1 g/L nickel.
In keeping with FPX Nickel’s aim to build a carbon-neutral mining operation at the Baptiste project, the company co-founded a multi-university research program to study carbon capture and storage at mining sites. The program is in collaboration with Anglo-American majority-owned (LSE:AAL,OTCQX:AAUKF) DeBeers, and the Government of Canada.
Metallurgical testing conducted by FPX Nickel for the production of high-grade (> 65 percent nickel) awaruite concentrate has included three campaigns with successful pilot-scale test work. This large-scale pilot test work validates the processing strategy for Baptiste, leveraging awaruite's ferromagnetism, high density, active surface properties, and very high nickel content.
Baptiste’s awaruite mineralization promotes a simple three-stage process for the production of nickel sulphate from concentrate. It has the potential to be more efficient than the typical five-stage process required to convert sulphide and laterite ores into nickel sulphate. Rapid nickel extraction of more than 98 percent in 60 minutes is achieved under mild pressure leaching conditions with significantly lower equipment size/risk, power consumption, pressure and temperature requirements than typical high-pressure acid leach (HPAL) operations.
In January 2024, FPX Nickel closed a C$14.4 million strategic equity investment from Sumitomo Metal Mining. Net proceeds of the private placement will be used to fund exploration and development activities at its Baptiste nickel project, and continue ongoing environmental baseline activities, feasibility study readiness activities, and general corporate and administrative purposes.
FPX Nickel’s partially-owned subsidiary CO2 Lock, specializing in carbon capture and storage (CCS) via permanent mineralization, has completed a comprehensive field program at its SAM site in central British Columbia including the first-ever successful injection of CO2 into a brucite-rich ultramafic mineral project. This achievement marks a significant milestone in the development of CO2 Lock's innovative in-situ CO2 mineralization technology.
FPX Nickel’s management team consists of highly experienced capital markets and mining professionals, including Canadian Mining Hall of Fame member Dr. Peter Bradshaw, and veteran geologist Rob Pease.
The Decar Nickel District covers over 410 square kilometers and is 80 kilometers west of the Mt. Milligan mine, central British Columbia. The property hosts the highly prospective Baptiste nickel project, which is one of the world’s largest development-stage nickel projects. The asset is accessible via logging and paved roads, with railway and hydropower nearby.
Baptiste hosts nickel-iron alloy mineralization, with NI 43-101 compliant indicated resources at an average grade of 0.123 percent DTR nickel for 2.3 million tons and 391 million tonnes of inferred resources with an average grade of 0.115 percent DTR nickel.
In September 2022, the company completed a 2,504-meter step-out drilling program at its Van target, located 6 km north of Baptiste in the Decar Nickel District. The completed holes stepped out aggressively from the initial discovery area, testing the potential for nickel mineralization up to 1 kilometer west of the holes drilled in 2021.
Baptiste Project 2023 PFS
In 2023, the company released the preliminary feasibility study results for the Baptiste nickel project indicating an average production of 59,100 tons of nickel per year in concentrate over a 29-year mine life. The project will be developed in a phased approach, with an initial mill throughput rate of 108,000 tons per day (Phase 1), followed by an expansion to 162,000 tons per day (Phase 2).
In line with the project’s robust economics, FPX Nickel has commenced the development of a standalone nickel sulphate refinery study which will be completed in the first quarter of 2025.
In 2023, FPX Nickel signed a non-binding memorandum of understanding with Japan Organization for Metals and Energy Security (JOGMEC) and the Prime Planet Energy & Solutions (PPES) joint venture between Toyota Motor Company and Panasonic, setting out a framework for FPX and PPES to explore collaborative opportunities for the vertical integration of nickel production at the Baptiste project and the production of nickel sulphate and cathode active materials for the PPES supply chain.
In 2024, FPX Nickel completed pilot-scale hydrometallurgy refinery testwork and produced battery-grade nickel sulphate. This milestone marks the completion of the campaign funded in part by a grant from Natural Resources Canada (NRCan) under the Government of Canada's Critical Minerals Research, Development and Demonstration (CMRDD) program.
Martin Turenne is a senior executive with over 15 years of experience in the commodities industry, including over five years in the mining industry. He has extensive leadership experience in strategic management, fundraising, economic analysis, financial reporting, regulatory compliance and corporate tax. Turenne formerly served as CFO of First Point Minerals Corp. from 2012 to 2015 and in positions at KPMG LLP and Methanex Corporation. He is a member of the Canadian Institute of Chartered Accountants.
With more than 20 years in the industry, Andrew Osterloh is experienced in process engineering, plant metallurgy and project management. He was formerly the project director and head of studies for Fluor Canada, leading feasibility study work for large base metal assets. He was formerly project director and manager of studies for Fluor Canada, where he led feasibility studies for several large base metal assets in the Americas for Glencore, Freeport-McMoRan, Teck and Newmont. Osterloh is a member of the Association of Professional Engineers of British Columbia and holds a Bachelor of Applied Science in mineral process engineering from the University of British Columbia.
Felicia de la Paz started her professional career with KPMG LLP's audit practice in Vancouver, culminating with her role as a senior manager leading large teams in the execution of audit engagements for a variety of large and complex organizations across multiple industries. After joining Equinox Gold as the corporate controller in 2017, she was part of a core financial leadership team overseeing corporate accounting, financial reporting and system development, managing the successful integration of several new acquisitions across multiple jurisdictions, including both operating mines and large-scale development projects. She acted as the vice-president of finance for Vida Carbon, a carbon royalty and streaming company, and has more recently been providing financial and systems advisory services to public companies in the mining sector. She is a chartered professional accountant and holds a Bachelor of Commerce (Honours) from the University of British Columbia.
Dr. Peter Bradshaw is a geologist with more than 45 years of international mineral exploration experience in over 30 countries with Barringer Research, Placer Dome, and Orvana Minerals. He is a member of the Canadian Mining Hall of Fame. Bradshaw’s key discoveries and project involvement include Porgera Gold Mine, Papua New Guinea; Kidston Gold Mine, Queensland, Australia; Misima Gold Mine, Papua New Guinea; Big Bell Gold Mine, Western Australia; Omai Gold Mine, Guyana; Decar Nickel Project, British Columbia, Canada; director of Aquila Resources; co-founder and first chairman of the Mineral Deposit Research Unit, University of British Columbia.
Nigel Fisher brings 20 years' experience leading environmental assessments, permitting and management systems, developing and executing on regulatory strategy and advancing governance and funding agreements with Indigenous governments across British Columbia. He has held progressively senior roles with New Gold, Teck Resources, Woodfibre LNG, and most recently, Skeena Resources as director of environment and regulatory affairs. In his prior roles, he successfully obtained multiple regulatory approvals for large-scale resource projects while maintaining compliance with existing and changing legislation.
Jarett Lalonde is a highly regarded public affairs leader with over 20 years' experience in the natural resources, technology and regulated products sectors. In his most recent role as global head of product policy at Shopify, Lalonde was instrumental in crafting compelling public affairs narratives for the company's diverse product offerings, and spearheading engagement with policy makers across North America and Europe. Before joining Shopify, he worked with Global Public Affairs, a leading government relations and strategic communications firm, where he performed advisory work for numerous companies advancing large-scale natural resource projects in British Columbia and across Canada. Lalonde previously served as chief of staff to the Attorney General & Minister of Justice for the province of British Columbia, and as policy advisor to the Minister of Natural Resources Canada.
Rob Pease is a geologist with more than 30 years of experience in exploration, mine development and construction. He is the former CEO of Terrane Metals, acquired by Thompson Creek for C$650 million. Pease was also the former director of Richfield Ventures, acquired by New Gold for C$500 million. He is a director of Pure Gold Mining Inc. and Liberty Gold.
William Myckatyn is a mining engineer with more than 34 years of experience in the mining industry. Myckatyn is the founder and CEO of Quadra Mining Ltd. He served as chairman and subsequently co-chairman of Quadra FNX Mining until its takeover in 2012. Prior to this, Myckatyn was chairman, president and CEO of Dayton Mining., where he led the restructuring and merger with Pacific Rim Mining. He was the former president and CEO of Princeton Mining and Gibraltar Mines. For over 17 years, he worked for various operations controlled by Placer Dome and its associated predecessor companies, including four separate mines in Australia and the Philippines. He is a director of San Marco Resources and OceanaGold.
Peter Marshall is a mining engineer with 30 years of experience in mine development and construction. Marshall was formerly VP of project development at New Gold and SVP project development at Terrane Metals. He has extensive mine development experience in central British Columbia, including completing the Blackwater gold project feasibility study and development, and early construction of Mt. Milligan copper-gold mine, acquired by Thompson Creek for C$650 million in 2010.
James Gilbert has more than 30 years of investment and transaction execution experience, with more than 20 years focused on the international mining and metals industry. Gilbert held senior management positions with Rothschild, Gerald Metals Inc. and Minera S.A., a private mining investment company. His experience covers mergers and acquisitions, debt and equity financing, off-take and specialty refining agreements, joint venture negotiations and strategic marketing. He was formerly director of AQM Copper Inc., acquired by Teck Resources in 2016.
Anne Currie is a recognized leader in the permitting of major Canadian mining projects, with over 30 years of experience in the private and public sector, including as a former senior partner with leading global consultancy Environmental Resources Management. She was British Columbia's chief gold commissioner, the chief regulatory authority for the Mineral Tenure Act., and has an exceptional track record in steering the environmental assessment and permitting processes for major mining projects in British Columbia, including for the KSM, Brucejack, Kemess Underground and Blackwater projects.
Kim Baird is an accomplished leader and strategic advisor working with indigenous communities, governments, businesses and other organizations. In her prior role as the elected chief of the Tsawwassen First Nation, she negotiated and implemented British Columbia's first modern urban treaty, establishing for the Tsawwassen People ownership and governance over their land and resources.
Dan Apai has over twenty years of mining industry experience in civil engineering and engineering management over a diverse range of projects. In his previous role as a principal civil engineer for Fluor Canada, he led the study and detailed engineering works for numerous large-scale mining projects for clients including Teck, Newmont, BHP, First Quantum, Glencore, Josemaria Resources and Newcrest. Apai's technical expertise includes site layout, earthworks, water management, linear facilities (i.e., roads, powerlines, pipelines), and water supply systems – all elements that strongly influence the capital intensity, permitability, and operability of mining projects. Apai is a member of the Association of Professional Engineers of British Columbia and holds a Bachelor of Engineering from the University of Western Australia.
Tim Bekhuys is a senior mining executive with over 40 years’ experience in community engagement, environmental assessment and permitting. He was formerly VP environment, health, safety and sustainability for SSR Mining, where he led all aspects of sustainability reporting, environmental assessment and permitting activities. He also previously acted as director of environment and sustainability for New Gold, where he successfully led the government, permitting, Indigenous and community relations programs for the Blackwater project in central B.C. Bekhuys was a former member of the boards of directors of the Association for Mineral Exploration British Columbia, the Mining Association of British Columbia, and the Mining Association of Canada.
Keith Patterson is a senior geologist with over 25 years’ experience in greenfield exploration throughout North America, South America, Europe and Asia. He was formerly director of project generation and greenfield strategy with Eldorado Gold where he managed global exploration and project generation. Patterson acted as vice-president of exploration for Jinshan Gold Mines where he was responsible for the execution of exploration programs and project evaluations in China. He is a registered professional geoscientist with the Engineers and Geoscientists of British Columbia and holds a Master of Geological Sciences and a Bachelor of Geological Engineering, both from the University of British Columbia.
The third quarter opened with the price of nickel facing a downward trend that started after it reached a yearly high of US$21,615 per metric ton on May 20. The price on July 1 had fallen to US$17,357. The following week saw a pause in the downward trend and was briefly lifted to US$17,473 before resuming its downward trajectory to US$15,769 on July 25.
Nickel price, July 1 to October 1, 2024.
Chart via Trading Economics.
After bottoming out, the price quickly climbed to US$16,604 on July 31.
Nickel remained largely rangebound between US$16,150 and US$16,500 for the start of August, but saw upward momentum in the middle of the month that pushed the price to US$17,136 on August 27.
The beginning of September saw the price collapse again, reaching a quarterly low of US$15,741 on September 10 and just shy of the year-to-date low of US$15,668 set on February 9. However, pricing pressure wasn’t to last and the price of nickel saw rapid gains through to the end of September reaching a quarterly high of US$17,698 on October 1.
The big story for the last several quarters has been an oversupply of nickel from Asian markets, particularly Indonesia and Q3 2024 was no different.
According to data from S&P Global, mined nickel production from the country increased by 99,000 metric tons during the quarter and is forecast to be in the 2.4 million metric ton range by the end of 2024, representing 57 percent of total global production.
However, due to Indonesia’s permitting and quota system, sourcing consistent supply from the country has presented challenges for Chinese smelters who were forced to temporarily curtail output due to a shortage in feeder supply.
Despite having a large percentage of global supply, refiners in Indonesia have increasingly been turning to nickel imports from the Philippines, the number two nickel supplier, to maintain operations. The first seven months saw imports rise to 3.37 million metric tons versus just 374,454 tons produced in 2023.
Although China remains the biggest benefactor and investor of Indonesia’s nickel industry, Indonesia has been working to distance it economically from its partner as it tries to work out deals with Western partners.
While Indonesia has been working to distance itself from Chinese investment over the past few years to better position its nickel market for Western markets and inclusion under the US Inflation Reduction Act, a new trade pact looks to solidify ties with China.
Multiple cooperation deals were signed following a November 9 meeting between Chinese President Xi Jinping and Indonesian President Prabowo Subianto, which would see China investing more than US$10 billion into strategic sectors including nickel.
Among the investments is $1.42 billion agreement between Chinese battery material producer GEM (SZSE:002340) and Indonesian miner PT Vale (OTC Pink:PTNDF,IDX:INCO) for the construction of a high-pressure acid leaching (HPAL) plant. The new processing facility is necessary for the production of battery-grade nickel.
Additionally, Zhejiang Huayou Cobalt (SHA:603799) is working to raise US$2.7 billion in financing for a nickel refining and smelting project in partnership with Ford Motor Company (NYSE:F) and PT Vale. The project will also use HPAL processing and is expected to produce 120,000 metric tons of mixed hydroxide precipitate for use in electric vehicle batteries.
Even though demand for batteries continues to grow, it hasn’t been able to outpace the oversupply situation, this has largely been due to a weak Chinese economy.
China is the largest consumer of nickel in the world, with a majority of the metal destined to be used in the production of stainless steel, but a beleaguered real estate sector and broad economic deflation have dampened demand.
Nickel found pricing support in September as the Chinese government introduced a raft of stimulus measures that were intended to boost economic growth in the country. Among the measures included a 0.5 percent interest rate cut to existing mortgages and reduce the downpayment to purchase a home to 15 percent from 25 percent.
Although the package was responsible for a surge in nickel prices, in the weeks following the announcement nickel prices retreated, once again approaching yearly lows.
In another attempt to jump-start the economy, China introduced a US$1.4 trillion dollar debt swap on November 11 aimed at tackling “hidden debt” and freeing up funds at the local level by reducing interest payments on debt and helping drive growth.
Additionally, the Chinese government is planning to cut the deed tax for homebuyers to 1 percent from the current 3 percent in a further attempt to prop up the country’s economy.
In Canada, the government pledged C$46 billion for the development of four EV battery production plants that will require more raw materials than the Canadian mining sector can currently supply.
At his address to the Greater Vancouver Board of Trade on September 17, Mining Association of Canada President Pierre Gratton suggested Canada is too focused on downstream development and that in order to meet supply the four EV plants will need the support of 15 new mines.
“That’s only speaking from the standpoint of the four battery factories, to say nothing about all of the other needs that our economy requires, or that the US requires, including its defence industries. Unless we achieve the above, and this is the irony, our reliance on foreign sources for minerals and metals is only going to increase,” he said.
Overall, Gratton believes that there needs to be an additional C$32 billion in financing for mining and midstream processing projects.
In Europe, the implementation of its new Carbon Border Adjustment Mechanism (CBAM) that places a tariff on carbon-intensive products is drawing concern from the industry. The regulation is a complex system designed to balance prices and prevent an exodus of carbon-intensive manufacturing to nations with fewer emission controls.
Some are suggesting CBAM has no benefit for the European stainless-steel industry as it limits pricing to scope 1 emissions and doesn’t include downstream emissions from power generation and transpiration.
European steelmakers have become more dependent on nickel pig iron imports from Indonesia, so far 87,485 metric tons through the first eight months of 2024 versus just 1,006 metric tons in 2023. The increase has come alongside a wave of curtailments as the industry reacts to a flood of Indonesian nickel.
Investors should consider China’s outsized influence over the nickel market, both in terms of control over refined supply and demand from real estate and battery sectors.
Even though the EV sector in China has shown year-over-year growth of 32 percent through the first nine months of 2024, the industry's nickel demand hasn’t made up for shortcomings in the broader economy.
Surplus scenarios are expected to continue over the next few years with a 5.8 percent compound annual growth rate between 2023 and 2028. This will present a challenge for producers who are looking to restart operations in the short term as prices are expected to remain flat.
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Securities Disclosure: I, Dean Belder, hold no direct investment interest in any company mentioned in this article.