BHP Billiton Proposes Nickel Plant to Supply Electric Vehicle Market

BHP Billiton’s (NYSE:BHP,ASX:BHP,LSE:BLT) nickel division plans to prepare for future demand for lithium-ion batteries by building a nickel processing plant.
Nickel West Asset President Eduard Haegel said the firm is looking to spend over $43 million on the plant, which will supply the emerging electric vehicle battery market.
Haegel told an audience attending the Diggers and Dealers conference in Australia that he predicts electric car battery demand will comprise 90 percent of Nickel West’s output within five to six years, up from the current 10 percent. He acknowledged that battery sales “are growing quickly” as the cost to produce them falls and consumers turn toward less polluting technologies.

BHP’s nickel plant will be built at the Kwinana refinery in Western Australia, and Haegel said the facility will be capable of producing 100,000 tonnes of nickel sulfate per year. The plant will be the largest in the world of its kind, and BHP is considering a Stage 2 expansion that would double output.
He anticipates that the nickel plant will begin production in April 2019, and said the concentration of nickel in lithium-ion batteries is increasing “because it increases energy density and gives greater range.”
In a June report, Bloomberg Intelligence analyst Eily Ong noted that global nickel demand could more than double by 2050, with part of that demand coming from rising electric vehicle sales.
Wall Street investment bank Morgan Stanley (NYSE:MS) predicts that by 2050, 81 percent of the 132 million new cars sold will be electric vehicles. Currently, batteries account for about 3 percent of nickel demand, while two-thirds is consumed by the stainless steel industry.
Haegel said the project will get significant leverage because of existing infrastructure at the refinery, and highlighted Australia’s free trade agreement with China, South Korea and Japan. He added that BHP is meeting with potential Asian customers and plans to approach battery manufacturers to begin discussions.
BHP’s nickel plant announcement follows news that Asian battery makers are attempting to use more nickel in lithium-ion batteries and less cobalt to cut costs.
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Securities Disclosure: I, Melissa Shaw, hold no direct investment interest in any company mentioned in this article.