Nickel Supply Chain Vulnerabilities Spark North American Mining Push
Burlington, Ontario -- January 23, 2025 -- NewsGenie -- Demand for battery-grade nickel is projected to triple by 2030, largely driven by electric vehicle (EV) production in the West. However, Indonesia, supported by China, dominates global nickel production, raising concerns about economic and geopolitical leverage. Without secure nickel supplies, North America's electric battery production, defense, and energy transition are at risk.
Nickel is a critical mineral essential for EVs, stainless steel, aerospace and defense, AI and data centers, and the energy transition. Electric batteries, in particular, rely on nickel to enhance energy density and performance. While China is increasing its use of lithium-iron-phosphate (LFP) batteries, high-nickel chemistries remain prevalent in North America and Europe. Benchmark Minerals projects that nickel-based chemistries will capture 85% of battery cell production capacity outside of China by 2030.
Nickel is at the center of a global trade war, with Indonesia driving prices down to eliminate Western competitors. This has led to mine closures, particularly in Australia. Western companies are investing in Indonesia, but concerns remain about Indonesia leveraging its market influence, similar to China's actions with antimony, germanium, and gallium.
The Biden administration introduced a US$7,500 tax credit for new EVs under the Inflation Reduction Act (IRA), but Donald Trump has said he wants to scrap the IRA EV tax credit. One solution is to leverage Canada's natural resources. The Canadian government has started to restrict foreign owned investments in the critical minerals sector, particularly affecting Chinese investments. The provinces are also looking into ways to shorten permitting times. Both Canada and the US are strengthening ties across the industry.
New exploration projects, like Canada Nickel (TSXV: CNC, OTCQX: CNIKF), are working to meet the expected surge in demand. Canada Nickel boasts the largest nickel deposit in North America and are positioning themselves for Canada Nickel a global nickel market they believe is "fundamentally short of nickel in medium and long-term – little to no supply growth outside Indonesia/China."
Vale (NYSE: VALE), Glencore plc (LSE: GLEN | OTC: GLNCY), Canada Nickel Company (TSXV: CNC, OTCQX: CNIKF), FPX Nickel (TSXV: FPX, OTCQB: FPOCF), Aston Minerals (ASX:ASO), Lundin Mining Corporation (TSX: LUN), and Talon Metals Corp. (TSX: TLO, OTC: TLOFF) are key players in North America's nickel mining supply. Securing supply chains is a strategic imperative for North America’s national security.