A world nickel industry guru identified the Sconi nickel laterite project in Queensland as one of the potential major new mines in the world to service the growing battery market for electric vehicles.
The Sconi deposit is located near Greenvale west of Townsville.
Jim Lennon of Macquarie Commodities (Europe) listed Sconi in his keynote and virtual presentation to Paydirt Media’s Australian Nickel Conference in Perth last week (Tue 6 Oct 20).
The themes of this year’s conference took in the dramatic uplift in exploration and technology developments for nickel but the posteriors on seats were entirely West Australian due to State border restrictions due to COVID-19.
Mr Lennon’s list of new mines geared for the battery market was dominated by under-development laterite projects in Indonesia linked to the Chinese auto batteries and stainless steel markets.
Sconi was expected to contribute 16,000 tonnes of nickel metal and 2,200 tonnes of cobalt annually from 2025.
Mr Lennon said while the world market was bracing for an uplift in Indonesian production, largely for China’s pig nickel market, the perceived low cost may be challenged if a slide in cobalt’s price continued.
He pointed out that while market observers talk up the growth in electric vehicles (EVs) the current market for nickel was still 10 times greater for stainless steel.
Speakers at the conference have pointed out that an Indonesian market onslaught with pig nickel will more likely dominate the Asian stainless steel market, rather than the quality end for EV batteries.
A lighter moment was provided by Peter Bradford, chief executive for IGO, a dominant nickel and gold producer in Western Australia, who proudly showed a photo of his upmarket Tesla EV car, saying it was the best car he had ever driven.
Bradford said his year-old car had recently been given a performance improving upgrade which had been dubbed “Cheetah Mode.”
Dan Lougher, managing director of leading sulphide nickel producer Western Areas, pointed to a lift in general mine injuries and performance lapses was due to the fact local operations were unable to bring in expertise and experienced operators due to the border restrictions.
This issue was likely to be experienced right across the Australian mining industry.
In opening the conference, the principal of PCF Capital Liam Twigger said the markets recover a lot quicker following a pandemic disaster than from a crash created by bad political and economic policy such as the Asian Currency Crisis or the GFC – which took years to overcome.
He said Covid-19 has shone a light on shortcomings of globalisation, long supply chains and the reliance on any single market.
“Governments around the world are stepping in like never before, to secure resources, protect industries, print money and talk down their currencies to stimulate exports,” he said.
“It’s a race to the bottom and the global pump priming, printing of money and job keeping has set the scene for a massive resurgence in consumption and demand for real and tangible assets and commodities – especially precious and base metals over paper assets and currencies.”
Twigger said markets are starting to price this in, and there has been a return of the “generalist investor” back into resource stocks with a focus on the riskier end of the curve.
He said the average share price of companies presenting at this week’s conference was up 42 percent year-on-year since last October and up 112 percent if you include Chalice Gold Mines, which has made a spectacular platinum group metals and nickel discovery an hour’s drive north of Perth.
Explorers and developers were enjoying their time in the sun with companies such as Centaurus, Impact and Blackstone up on average 160 per cent.
The market resurgence was reflected in the record attendance at the 25th annual Australian Nickel Conference to above 300 delegates.
Liam Twigger said that on the merger and acquisition front he expected a lot more activity over the next 12 months.