trending Market Intelligence /marketintelligence/en/news-insights/trending/gwYsNuaMCAaAuxpRlp_4iw2 content esgSubNav
In This List

BHP moves into new energy market with plans to produce nickel sulfate

Case Study

An Oil and Gas Company's Roadmap for Strategic Insights in a Quickly Evolving Regulatory Landscape


Essential IR Insights Newsletter Fall - 2023


Battery metals - unbated long term need for supply security despite short-term headwinds


Essential IR Insights Newsletter - Summer July-August 2023

BHP moves into new energy market with plans to produce nickel sulfate

BHP Billiton Group approved funding of US$43.2 million for a project at the Kwinana refinery in Western Australia that will allow the mining heavyweight to produce an initial 100,000 tonnes per annum of nickel sulfate to supply the global battery market.

Eduard Haegel, Asset President Nickel West at BHP, revealed Aug. 9 at the Diggers & Dealers Mining Forum in Kalgoorlie, Australia, that BHP had given the greenlight to the project, which is expected to produce first nickel sulfate in April 2019.

"Stage one will produce 100,000 tonnes per annum of nickel sulfate, making Nickel West the world's largest exporter," he told delegates.

BHP will produce nickel sulfate by conveying powder from the refinery's existing powder storage bins to a set of dissolution tanks where the powder will be dissolved in sulfuric acid from the Kalgoorlie nickel smelter.

Nickel sulfate is one of the sulfates used in the metal oxide cathode required for lithium ion batteries. The cathode is made by mixing in a reactor different metal sulfates, including nickel sulfate, to produce an intermediate product called cathode precursor.

"Nickel sulfate is a great fit for Nickel West," Haegel said. "There is low technical risk, it has higher margins than what we achieve for our briquettes, and it repositions Nickel West in the new energy market."

Nickel West is noncore to BHP's portfolio, and the mining giant has in the past looked at divesting the business without success, but a potential sale is still in the cards.

"It doesn't fit the strategic description of what ... is a core business for BHP and it fails to do that on a range of different strategic drivers," Haegel said. "So at some point in the future it is likely that it will exit out BHP, but we have no timeline. We have no rush."

In the meantime, Haegel said BHP is focused on trying to extract value from the business.

"If someone comes along and drops a large amount of money on our table, of course we'll look at that, but what we're totally focused on is creating a really good business," he said.

"We're leaving no stone unturned in our pursuit to find value, and we're doing that at every different level of the business. Collectively, we're fighting hard to create cash so that we can invest into the business."

Haegel is confident that the new higher-margin nickel sulfate venture will find a market, and BHP has already been in talks with potential Asian customers.

"We're going to spend a lot of time in Asia talking to customers. We didn't make this decision without already doing so," he said. "We're optimistic that we'll find a ready market for us as we ramp up production."

BHP believes that there is going to be a very large increase in nickel sulfate demand over the mid-term, driven by growing demand in the electric vehicle and energy storage markets.

"The attractiveness of nickel-rich batteries is their higher energy density, which allows cars to travel greater distances between charging, as well as their lower costs," Haegel said.

"The high price of cobalt and its lack of availability is already encouraging more rapid adoption of these more nickel-heavy technologies."

BHP expects to eventually undertake an expansion of nickel sulfate production to 200,000 tonnes per annum. At full capacity, the plant will consume 44,000 tonnes of nickel powder and will be the largest single nickel sulfate facility in the world.