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Scaling Up Nickel Supply in North America Won't be Easy
Sourcing nickel supply from North America will be a big challenge as every mine will be needed to meet increasing demand from the electric vehicle space.
Geopolitics are taking an increasingly prominent role in the battery space, with North America looking to take further control of its supply chains, including sourcing of key battery raw materials.
But meeting the expected lithium-ion battery demand will be a massive challenge, Mark Selby, CEO of Canada Nickel Company (TSX:CNC,OTCQX:CNIKF), said during a panel discussion at this year’s Benchmark Week, adding that nickel consumption in North America is set to increase by three to fivefold in the next decade.
“We need not only to mine but process half a million tonnes in North America. There are mining projects, but I always say we need all of them and then more,” he told the audience in Los Angeles.
Having watched US policy developments this year, including the launch of the Inflation Reduction Act, Todd Malan, chief external affairs officer at Talon Metals (TSX:TLO,OTC Pink:TLOFF), said during the discussion that he remains optimistic.
“I think that whether it's nickel from US sources, nickel from allies in Australia or Canada, or whether it's nickel from recycling, there's not just this policy exhortation; now there's a lot of money behind it,” he said. “I think that is going to be really helpful in meeting the challenge. I'm not saying it's going to be easy, but it seems that there's now an enormous new resource to focus on.”
Earlier this year, the Biden administration awarded grants of US$2.8 billion for the development of battery manufacturing in the US. Talon Metals, which is looking to build a battery minerals processing facility in North Dakota, was one of 20 companies to receive a grant. Talon has also signed a supply agreement with Elon Musk's Tesla (NASDAQ:TSLA) for 75,000 tonnes of nickel concentrate to be produced from the company’s Tamarack nickel project in Minnesota.
For upcoming nickel projects to come online, one of the main challenges is how long the permitting process takes; however, Malan said there's a lot being done on the permitting front that is not being taken into account.
“I think, as we talk about permitting, it's a real risk for the industry that we could stumble over if we actually asked for something that's too fast, cutting corners and making people feel disenfranchised from the process. (We would be) doing ourselves a huge disservice,” he said. “We have to have a careful permitting process that’s science-based, that works at pace, but is rigorous. Because if we lose public confidence, then the whole thing goes away.”
Selby agreed, saying that there’s a need for a system that is fast and doesn’t cut corners.
“The money will come at some point … but permitting remains the real backlog to be able to bring all the metal that is needed this decade,” added the CEO of Canada Nickel Company, which is advancing the Crawford nickel-cobalt sulfide project in Ontario.
As things stand today, North America still needs nickel supply from other regions, including Russia.
“We just can't do without it,” Selby said. “Global nickel supply last year was 2.6 million tonnes — 1.6 million tonnes of that was China and Indonesia, the rest of the world was a million, and Russia was 20 percent of that.”
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Securities Disclosure: I, Priscila Barrera, hold no direct investment interest in any company mentioned in this article.
Editorial Disclosure: Canada Nickel Company is a client of the Investing News Network. This article is not paid-for content.
Priscila is originally from Buenos Aires, Argentina, where she earned a BA in Communications at Universidad de San Andres. She moved to Vancouver for the first time in 2010 and fell in love with the city. A few years after she went to London, UK, to study a MA in Journalism at Kingston University and came back in 2016. She enjoys reading, drinking coffee and travelling.
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