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BHP to begin nickel sulfate production at Nickel West in Q2'20

BHP Group intends to start nickel sulfate production at its Nickel West operation in Western Australia in the second quarter of 2020, targeting the electric vehicle battery market, Reuters reported Aug. 2, citing asset President Eddie Haegel.

The mining heavyweight kicked off construction of a US$43.2 million plant to increase nickel sulfate output at Nickel West in August 2017. In late 2018, the Western Australian government approved the development of the Venus nickel deposit to feed the Nickel West battery chemicals business.

We anticipate that there will be no sustainable premium in the lithium sector, whereas we think that is not the case for nickel," Haegel said. "We think that in the medium to longer term there will be a margin that will be sticky for nickel, and so we consider it an attractive commodity."

BHP plans to initially produce about 100,000 tonnes of nickel sulfate per year, with production to ramp up in succeeding years. Capacity could be tripled through second- and third-stage expansions, according to the report.

However, work on creating a separate circuit to extract cobalt has been shelved on the back of weak nickel prices and a September 2018 fire at the Kalgoorlie nickel smelter.

Multiple attempts in the past to sell Nickel West fell through, with BHP later opting to retain the operation to capitalize on burgeoning demand for raw materials for electric vehicle batteries.