The Elements of Innovation Discovered
The Elements of Innovation Discovered
Critical Minerals Alliances 2024 - September 16, 2024
America sports only one nickel mine and no refinery – raw nickel concentrate is sent to a Canadian smelter, with most of the final product sent back to the United States primarily as stainless steel, adding to the overall carbon footprint.
As a critical battery metals with environmental challenges, nickel has a complex relationship with the energy transition.
Batteries are set to overtake stainless steel as the largest end-user of nickel – but that's only the tip of the iceberg – nickel is also needed for high-performance alloys used for wind turbines and solar installations.
Nickel's leading use continues to be for steelmaking, which accounts for 65% of the metal's consumption.
Nickel has a complex relationship with the ongoing energy transition: It provides relatively inexpensive energy density and greater capacity to the lithium-ion batteries powering electric vehicles and storing clean energy, helping to lower the cost of each kilowatt hour. Its properties have been instrumental in untethering the portable electronics we use every day and incorporating clean power produced by renewables such as wind and solar to industry and grids formerly reliant on fossil fuels.
Its drawbacks involve a long history of unsustainable extraction and refining processes.
Nickel's versatility has placed the silvery metal into nearly every aspect of daily life – from spoons to surgical tools, automobiles to bridges, jet engines to construction equipment, and construction itself. It has many advantages, including good catalytic activity, high mechanical strength, excellent corrosion resistance and thermal conductivity.
Today, nickel also plays an increasingly significant role in the energy transition. In the coming years, expect its use to grow exponentially – an increase of around 65% by the end of the decade. Global demand for nickel is predicted to steadily grow to 3.47 million tons in 2024 from 3.2 million in 2023 due to its usage in fuel storage and EV batteries.
Nickel's leading use today is in steelmaking, the backbone of global industry, which accounts for about two million metric tons. The battery industry follows with 465,000 metric tons.
According to the United States Global Survey (USGS), "the leading uses for primary nickel are alloys and steels, electroplating, and other uses including catalysts and chemicals. Stainless and alloy steel and nickel-containing alloys typically account for more than 85% of domestic consumption."
Nickel became widely used in rechargeable batteries, most commonly in nickel-cadmium (NiCd) and in the longer-lasting nickel-metal-hydride (NiMH), which came to the fore in the 1980s, introducing the world to smaller, high-powered, and longer-lasting portable devices.
The mid-90s saw the first significant use of NiMH batteries in hybrid vehicles like the Toyota Prius. Around the same time, commercial lithium-ion batteries for personal electronics burst onto the scene.
To keep up with government- and industry-proposed climate goal trajectories, the total mineral requirements by clean energy technologies are forecast to rise significantly over the next decade. (The EV and energy storage markets are only the beginning – nickel is needed for high-performance alloys used in constructing massive wind turbines and solar panels as well.)
Batteries are set to overtake stainless steel as the largest end-user of nickel – but that's only the tip of the iceberg – nickel is also needed for high-performance alloys used for wind turbines and solar installations.
"The biggest source of demand variance comes from the uncertainty surrounding announced and expected climate ambitions," the International Energy Agency (IEA) inked in a report on critical minerals. "Governments have a key role to play in reducing uncertainty by sending strong and consistent signals about their climate ambitions and implementing specific policies to fulfill these long-term goals."
Batteries are set to overtake stainless steel by 2040 as the largest end-user of nickel.
The U.S.-proposed growth of hydrogen hubs, fuel and fuel cells also boosts nickel requirements for use in catalysts and electrolyzers; geothermal power is also a major employer of nickel.
"Of the total mineral demand from all low-carbon power sources in 2040, geothermal accounts for 80% of nickel demand, nearly half of the total chromium and molybdenum demand, and 40% of titanium demand," the IEA wrote.
According to a meta-analysis by the International Energy Forum (IEF), annual needs for nickel driven by energy transition technologies combined could increase from less than one million metric tons today to two to five million metric tons by 2050.
America relies on imports for more than half of its annual nickel consumption, with about 45% supplied from Canada and the balance is covered mainly by Australia, Norway, and Finland. Canadian nickel imports to the U.S. have increased over the years from $527 million in 2022 to $1.04 billion in 2024.
Last year, the U.S. produced an estimated 17,000 metric tons of nickel, all from the Eagle Mine in Michigan (the only U.S. nickel mine in operation). This was a decrease of more than 10,000 metric tons from 2015. Global overproduction has kept prices low – sometimes too low to justify production.
Global surplus and low prices can make it difficult for mining companies to raise money for projects and stay profitable – leading to reduced output, suspended operations, or even abandoned projects – something the North American nickel industry can't afford, especially as the cost of going green (updating existing mines or opening new state-of-the-art projects) runs higher.
Streamlined permitting and government incentives geared to encouraging greener projects and byproduct and coproduct development at existing mines have been necessary to encourage a stable domestic product.
The last two years have shown a sea-change in international relations; the U.S. imported $19 million in refined nickel from Russia in 2023, a 93% drop from 2022.
A U.S. International Trade Commission briefing declared, "In response to Russia's invasion of Ukraine in February 2022, many trade partners that imported nickel from Russia, including many in Europe and the United States, imposed sanctions and trade actions that curtailed imports of nickel from Russia. This situation could present potential supply challenges as nickel demand is anticipated to grow in the future."
Russia and China are both categorized as Foreign Entities of Concern by the Department of the Treasury, potentially making batteries with nickel earmarked from those countries ineligible for credits under the Inflation Reduction Act. In coordination with the UK, the Treasury prohibited aluminum, copper, and nickel imports of Russian origin produced on or after April 13, 2024, and limited their usage on global metal exchanges.
Despite a contentious trade relationship, the U.S. imports from China. However, due to strong political differences, unsustainable practices, poor environmental, social and governance (ESG) ratings, and a history of seemingly dirty market dealings, North America and its allies are seeking ways to reduce extensive dependence on China's monopoly on critical minerals, including nickel products.
In the past decade, Indonesia's oil and gas production has diminished, and the country's nickel production has exploded onto the international scene. Now representing nearly half of global production, it has also been a problematic import, bought up by China and snubbed by the U.S. due to the country's reported deforestation, extensive pollution, and hazardous working conditions.
The flood of Indonesian nickel, most of which requires an energy-intensive process powered by coal to produce, has forced several western mining companies that produce cleaner nickel but at higher financial costs to shut down operations.
However, in its most recent impact report, Tesla Inc. (which snapped up a five-year, $5 billion nickel deal with the country early on) maintains that the transition to EVs "will not be possible by only relying on non-Indonesian nickel."
Given inadequate mineral production at home, the U.S. – which also holds limited mineral inventories in its National Defense Stockpile – and other NATO militaries currently rely on vulnerable supply chains, driving the reality home that domestic mining and secure, friendly international imports are needed.
A shortage of green nickel would hurt far-reaching goals and economics in both the transportation and energy sectors, but when it comes to defense, the armed forces don't have the luxury of being picky about means.
Nickel is also used in military steel products, armor plating for tanks, anti-aircraft firearms and warships, as well as bullets and primers for small arms ammunition. Private and defense aerospace industries are a leading consumer of nickel-based superalloys in turbines and jet engine components. Tungsten nickel-iron alloy can attenuate and redirect electromagnetic waves to protect sensitive electronics.
Nickel's leading use continues to be for steelmaking, which accounts for 65% of the metal's consumption.
The U.S. military also uses a lot of batteries, both in portable electronics carried by soldiers and in an increasing number of electric vehicles being deployed.
The Department of Defense (DOD) invested $20.6 million in developing the North American nickel supply chain by nearly doubling Canada's Talon Metals nickel exploration budget in Minnesota and Michigan. The partnership has funded nearly half of Talon's 2024 exploration plan.
The DOD also awarded $7 million to The Doe Run Resources Corporation this year under the Defense Production Act Investment program to facilitate the creation of a demonstration-scale hydrometallurgical plant in Viburnum, Missouri, to separate cobalt and nickel.
North America is a leader in nickel recycling, developed early on by the stainless-steel industry, which recognized the inherent economy of recycling compared to the cost of mine development, with over half of the nickel in circulation being recycled.
"Most secondary nickel was in the form of nickel content of stainless-steel scrap. Nickel in alloyed form was recovered from the processing of nickel-containing waste. Most recycled nickel was used to produce new alloys and stainless steel," USGS penned in its Mineral Commodity Summaries 2023 report.
The U.S. also produces nickel as a byproduct of smelting and refining platinum-group-metal ores in Montana and historic mine tailings in Missouri.
Across the critical mineral mining space, waste is being reassessed as a secondary mineral resource, a way to supplement primary mining. Genuine closed-loop practices are being developed, unlocking local sources closer to where they are needed, increasing overall resource independence, and notably reducing costs and energy use.
The Department of Energy (DOE) continues to promote an expanded battery recycling industry, focused on developing more refined processes capable of recovering critical minerals (each with its own policy initiatives, including nickel) to make a circular economy possible.
DOE's Battery Manufacturing and Recycling Grants program has a $3 billion budget to ensure "a viable domestic manufacturing and recycling capability to support a North American battery supply chain."
While chemical leaching, smelting and pyrometallurgy are in use today, next-generation battery recycling will be more exacting and efficient. To smelt and recover a metric ton of metal generates up to 2 metric tons of carbon dioxide. Following that, only 40%-60% of nickel and cobalt are recovered. Base metals also require further processing and refining before they can be reused.
As an example, with the support of Canadian grants, RecycLiCo's proprietary closed-loop hydrometallurgical process produces no greenhouse gas emissions, no landfill waste and low energy consumption when recycling lithium-ion battery scrap to be upcycled as high purity, battery-ready materials.
Nickel is one of the most technically complex metals to process and refine, with every operation uniquely dependent on the category of ore deposit – sulfide, oxide, or laterite – and influencing later steps down the value chain. The industry is tackling a multitude of hidden costs by way of environmental challenges ranging from excessive water use to pollution and high emissions.
The current challenge is to markedly increase supply while meeting a new standard of ESG requirements.
Michigan and the Midwest are rich in nickel concentrations, where U.S. mining projects have been struggling to break ground due to local resistance and federal mining restrictions.
Green nickel mining has had to contend with a negative history, bringing to light decades of unresolved "not in my backyard" sentiment, which globalization had previously avoided. U.S. projects are now being put through their paces of red tape, protests, and long permitting timelines.
As a critical battery metals with environmental challenges, nickel has a complex relationship with the energy transition.
But there is a growing desire for greener nickel, with companies and investors eager to uphold advancing standards, now more than ever. And it will take time and a marathon mentality to bring to market.
Ensuring nickel can be produced more sustainably requires new industrial practices and standardization. Transparency and tracking throughout the production cycle are key in confirming green nickel as using renewable energy instead of fossil fuels, reducing and treating waste, remediating water usage, and keeping miners safe.
"Technological advances could reduce nickel's environmental impact. For instance, there is increased interest in high-pressure acid leaching for nickel, which offers a less energy-intensive alternative to traditional extraction techniques. Research into bioleaching – which uses microorganisms to extract metals from ore, or even from e-waste – could even negate the need for high temperatures entirely," IEF analysts noted.
Specialized companies like Australia-based Queensland Pacific Metals also aim to refine and process nickel for EV batteries in a sustainable manner – with General Motors, LG Energy Solutions, and POSCO as investment partners. Nickel laterite ore will be processed using a proprietary method with no requirement for a tailings dam.
Innovative technological advancements are the revolutionizing force across the North American nickel market, from extraction to refining to recycling.
Innovations such as machine learning and automation are increasing mine safety and efficiency and improving performance while also enabling more sophisticated and effective recycling processes, driving overall costs down – a key factor in keeping mines in business and new projects inviting for investors.
The mining sector is also experiencing a rise in vertical integration – the expansion of a company into production stages normally handled by separate companies – upstream along critical minerals supply chains, with key players in manufacturing, retail, and transportation investing in anything from product offtake agreements to construction of neighboring refining and recycling hubs.
The development of more user-friendly recycling solutions is reducing the barrier to entry for consumers and companies alike. Accessibility, adaptability, and improved experiences bring a wider audience and increased adoption.
Government and private sustainability and collaboration initiatives are proving an increase in strategic partnerships and open data sharing with tech engineers, research institutions, and market leaders, enabling companies to leverage complementary strengths and accelerate sustainable innovation and commercialization.
Reader Comments(0)