BHP聽(ASX, LON, NYSE: BHP)聽will make a final investment decision on聽a major expansion of the processing plant at聽its Mt. Keith聽nickel mine in Western Australia as it invests further in battery metals聽to meet expected soaring demand.听
Nickel is a key component for EVs cathodes,聽and the world鈥檚 no. 1 miner sees nickel demand聽growing聽faster than anticipated due to聽a spike in the adoption of electric vehicles聽(EVs), as governments commit to聽decarbonizing聽their economies and set聽end dates for combustion engine sales.听
鈥淲e believe that over 2020 to 2030, overall nickel demand will grow at聽5%聽compound annual growth rate, and that nickel-in-battery demand will grow at a rate of 21%聽CAGR,鈥� BHP Nickel West president Eddy聽Haegel聽.听
EV giant Tesla聽(NASDAQ: TSLA)聽delivered more than 200,000 vehicles in April-June for the first time in a quarterly period.听New estimates put聽EVs accounting聽for 25%聽of all vehicles聽sold by 2030,聽Haegel聽said.听
Adding a concentrator聽at BHP鈥檚 Mt. Keith processing plant would increase capacity by up to 50% to 15 million聽tonnes聽per year.听
At the same time, the miner plans to cut聽its聽carbon emissions by 12% compared with 2020 levels at聽Mt. Keith and Leinster nickel mines聽thanks to a聽deal inked last week聽with聽Canada鈥檚 TransAlta Renewables.听
Haegel聽said there were聽several options to increase production rates at Nickel West, but noted that one of the most attractive ones聽was聽to complete聽exploration聽at the Cliffs聽underground聽mine and extend its聽productive life again.听
鈥淭o support this ambition, the development of a new聽roadway to connect the northern and southern聽mining聽areas at depth, will be completed this year. While this connection will improve ventilation and de-risk聽mining聽access, it also offers a聽substantial聽exploration聽platform to extend the mine at depth,鈥澛燞aegel聽said.听
New mines
BHP聽is also set to decide聽on at least one new mine on tenements picked up from Russian mining giant Norilsk Nickel when it exited Australia last year.听
The company is working on many fronts. Together with increasing supply it has taken steps to secure demand,聽including a聽recent聽deal with Tesla.聽The carmaker聽said in June聽it expected聽to spend more than $1 billion a year on battery raw materials from Australia given the country鈥檚 reliable聽mining聽industry and responsible production practices.听
BHP聽is also聽trying聽to buy Canadian nickel miner Noront Resources聽(TSX-V: NOT), who owns the early-stage Eagle鈥檚 Nest nickel and copper deposit in the Ring of Fire of northern Ontario. It has been billed by聽Wyloo聽Metals,聽which is also interested in the asset,聽as the largest high-grade nickel discovery in Canada since the Voisey鈥檚 Bay nickel find in the eastern province of Newfoundland and Labrador. 聽聽
鈥淲e have positioned ourselves to become a globally significant supplier to the battery sector and laying the foundations to create a sustainable business of scale,鈥澛燞aegel聽said.听
BHP鈥檚聽nickel division accounts for less than聽1%聽of its earnings, and the mining giant has previously made聽several attempts to sell its WA nickel operations.听
But聽the company聽decided in 2019 to hold on to the unit聽amid the positive outlook for battery materials and as聽EV聽sales took off.听