Will Cheap Asian HPAL Save the EV Industry from its Looming Success?

Lyle Trytten - President, Trytten Consulting Aug 11, 2020

Summary
The world needs massive investment in the supply of pure Class 1 nickel from new projects over the
next 20 years to meet the electrification element of decarbonization goals. Traditional high-grade
sulphide deposits, which have been the backbone of the Class 1 industry for decades, do not exist in
sufficient quantities to meet the coming demand boom. High-pressure acid leaching (HPAL) of tropical
laterites has been of limited and mixed success over the last 25 years, and history suggests that these
types of complex chemical facilities will continue to suffer with high capital intensity, slow ramp-ups and
reliability issues.
Increasing pressure on manufacturers for responsible sourcing of raw materials is expected to present
increasing scrutiny on mining, tailings impoundment/disposal and effluent disposal practices, as well as
direct and indirect GHG footprint other pollution impacts, such as from power supply. Large, lower-
grade sulphide deposits in countries with strict and thorough environment regulations and approval
practices, and excellent human rights frameworks and practices are a solution to the expected nickel
shortfall for EV production. Giga Metals’ Turnagain project and other ultramafic deposits in Canada (i.e.
Dumont in Quebec, Crawford in Ontario) offer potential for long-life, reliable operations with reduced
environmental and jurisdictional concerns. However, large new nickel mining projects are typically at
least a decade in the making. To realize true deep decarbonization by electrification in a timely manner,
significant investment is required now by strategic partners such as end users and concerned
governments.

Introduction
Amongst the most popular approaches to combat climate change is increased electrification of the
transportation sector – battery and hybrid electric vehicles (BEV, HEV) – along with energy storage
systems (ESS) to allow increased renewables penetration in the electricity grid. These solutions rely on
material increases in the availability of the key raw materials, with nickel, cobalt, and lithium being
identified as particularly important for their use in high-energy-density lithium ion batteries – both
nickel-manganese-cobalt (NMC) and nickel-cobalt-aluminum (NCA).
McKinsey1 notes that recent price spikes for cobalt have increased focus on less cobalt-intensive
chemistries, but still projects that the dominant battery technologies will be nickel-cobalt based. Given
the desire to increase energy density and decrease cost to allow for higher-range economic vehicles,
battery manufacturers continue to work to push down cobalt and push up nickel in the cathode mix2.
With projected growth in the BEV/HEV market for both vehicles sold and battery capacity per vehicle (to
increase BEV attractiveness to drivers), the required supply growth is very significant. Projections of
battery capacity growth to 2040 are varied, up to about 6,000 GWh/y. Today’s ostensibly best battery
technologies (NMC 811, NCA) consume about 0.8 kg Ni and 0.1 kg Co per kWh. Even considering only a
range of 3,000 to 4,000 GWh/y production, supply growth required is about 100%-150% of current total
production for nickel (i.e. from ≈2,400 Mt/y today to >5,000 Mt/y in 2040) and 300-400% of current
production for cobalt (≈140 Mt/y to >500 Mt/y) depending on battery mix (relative proportions of nickel
and cobalt in NMC and NCA technologies). Reversion to lower nickel NMC battery blends is unlikely:

1
Lithium and Cobalt – A Tale of Two Commodities; McKinsey; June 2018.
2
DBS Asian Insights, Nickel and the Battery Revolution, Aug 2019.

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energy density would be reduced, and costs would rise due to the higher content of more expensive
cobalt. Other battery technologies – such as vanadium flow batteries – may take a portion of the ESS
market, but that is the smallest part of the battery problem. Other existing battery technology, such as
lithium iron phosphate (LFP) does not look poised to be a significant element outside of limited range
cars in China.

The Nickel Market

The nickel market is unlike many metal markets, in that ≈50% of the production is in a pure form (vs
nominally 100% for copper, zinc, aluminum, etc). Since 65-70% of the consumption today is in stainless
steel, which welcomes impure nickel-iron alloys like ferronickel and nickel pig iron, the current
production balance is appropriate. Class 1 nickel is used primarily in high-nickel alloys, chemicals,
plating, and batteries, as well as being a chemistry trimming agent in stainless steel production.
During the last nickel shortage (2004-2008), the supply response was quite rapid for the lower-purity
forms through massive development of nickel pig iron as a new product with projects in China and,
subsequently, Indonesia. This has added on the order of 500 kt/y of low-grade nickel alloys to the
market. But a growth of 100-150% of current total nickel for batteries alone cannot easily come from
this route due to high purity requirements; this projected growth is really a 200-300% growth in Class 1
nickel (or its pure chemical analogues), from ≈1,000 kt/y to ≈3,000 - 4,000 kt/y.
Class 1 nickel is derived from two primary sources: HPAL facilities chemically dissolving abundant nickel
oxide ores (laterites) in the tropics and producing intermediates suitable for further refining (≈200 kt/y),
and increasingly rare sulphide concentrates which are smelted to nickel matte which is then further
refined (≈800 kt/y). Overall, laterite resources represent approximately 70% of known global resources,
with only the lower-grade limonite portion of these suitable for HPAL. The higher-grade saprolite
portions are more economically processed to ferronickel. Perhaps unfortunately, higher-grade limonite
is now being mined and shipped as nominally 1.4-1.6% nickel wet ore to feed new nickel pig iron plants,
eliminating its possible future use in HPAL facilities. Large, high-grade sulphide deposits, the traditional
backbone of the Class 1 nickel business, are becoming depleted and increasingly rare, lower-grade, and
more complex.
Direct refining of nickel sulphide mine concentrate is possible but rare: this approach was pioneered
with the Sherritt-Gordon Mines Ltd refinery in Fort Saskatchewan, Canada in the 1950s, and then
replicated with a “sister refinery” at Kwinana in Australia in the 1960s. Both of these facilities are now
used to process higher grade nickel intermediates: mixed sulphides from HPAL and nickel matte,
respectively. No new nickel concentrate refineries were built until the Vale Long Harbour facility in
Canada, which started in 2014.
There is a small amount of Class 1 nickel produced from the smelting of laterite ores, by converting
ferronickel to nickel matte with sulphur addition, and then refining the nickel matte using the traditional
refining techniques of the nickel sulphide industry. This high-cost practice was recently stopped by SLN
Doniambo in New Caledonia and is currently still used at PT Vale’s Sorowako facility in Indonesia.
What, then, is the future direction for supply of the high-purity nickel required for the growing battery
supply chain?

HPAL – Past to Present

HPAL facilities have a checkered history. The original facility, dating to the late 1950s at Moa, Cuba, is
still operating after 60 years, currently in a joint venture with Sherritt International. Domestically mined
ore is still available, but as with any mining project, orebody distance and quality degrades over time,

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adding operational challenges. This facility has had many challenges over the years, including decades
of below-design performance after operation was taken over by the Cuban government.
The second generation of HPAL, in the late 1990s in Australia, saw two out of three facilities
demonstrate poor economies of scale and close, and only Murrin Murrin (now Minara, a Glencore
facility) continues to operate today. Murrin Murrin suffered a very protracted ramp up that saw
production well below 80% of design for more than a decade. Subsequently, Ambatovy (Sherritt
International, Sumitomo Corp. and Kores), Goro (Vale and Sumitomo Metal Mining), and Ravensthorpe
(BHP Billiton) all struggled to maintain operations above 65% capacity and make an operating profit.
Ravensthorpe was shuttered and written down by BHP and then sold to First Quantum Minerals in 2010,
and has only operated part-time since. In 2020 we have seen the long-awaited announcement of Vale
exiting the Goro operation3 (deal yet to be completed) and Sherritt exiting the Ambatovy operation4.
The four largest HPAL operations ever designed have not provided financial returns to their developers.
Only the Coral Bay and Taganito (Sumitomo Metal Mining) and Ramu (Metallurgical Corporation of
China) facilities have been moderately successful by adopting simplified flowsheets (i.e. no refinery, no
acid plant for Sumitomo operations, no tailings storage for Ramu). As greenfield facilities these still had
4-6-year ramp-ups to approach design rate. In the last few years, a few new HPAL projects have been
initiated by Chinese developers in Indonesia, with promises of rapid construction and low capital and
operating costs. Construction appears to be stalled due to the pandemic, and progress is unclear.
History is against these facilities achieving the ambitious initial goals and setting a new benchmark that
revitalizes the HPAL industry. Stated cost estimates of $0.7B for the new Tsingshan facility in Morowali
do not account for the billions already invested in the infrastructure of the industrial park including
ports, roads, warehouses, and >1 GW of coal-fired power, and do not represent a true greenfields cost.
That initial cost is reported to be escalating by 50 to 100%5, still excluding this infrastructure.
DBS (Asian Insights August 2019) reports the three HPAL facilities expected to come on stream in 2020
with a combined capacity of 147 kt/y Ni. The market is awaiting the results, but it is difficult to see these
facilities coming onstream near the stated costs and achieving the nickel operations trifecta: rapid ramp-
up, reliable low-cost operation, with environmentally sound practices.
Following is commentary on three specific issues for the HPAL industry.
Reliability
The complex HPAL flowsheets work chemically, but rely on chemical dissolution of millions of tonnes per
year of laterite ore, to recover nickel into solution at concentrations below 10 g/L (10 m3 solution/kg Ni).
This demands very large processing facilities handling hot corrosive slurries and the challenges of high-
pressure, multi-phase flow. The combination of high temperatures and pressures, high acid addition,
and erosive service require extensive use of exotic materials such as titanium, tantalum, and ceramic
linings, with rubber-lining typically used extensively after the high-temperature sections.
Experience has shown that minor flaws in construction, operation, and maintenance can have
devastating impacts on the facility reliability. Piping and equipment failures cost money and operational
time and can release environmentally hazardous materials containing acid and dissolved metals, or
perhaps worse, toxic materials such as hydrogen sulphide.

3
Mining Technology.com, 2020 (deal not yet complete)
4
Mining.com, 2020
5
Reuters 2019

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Impact of Reliability on Operating Cost
Facility reliability can have a very substantial impact on operating cost. For any facility, there are
broadly fixed costs (labour, admin, maintenance) and variable costs and credits (mining, consumables,
utilities, cobalt credit, refining charges) which are partially or wholly proportional to throughput.
Byproduct credits and refining charges are directly related to production rates. Mining costs are
partially fixed (labour) and partially variable (fuel, maintenance). Maintenance costs are often
perversely related to production – higher maintenance costs are incurred with lower reliability and
therefore throughput. Consumables are slightly less than directly related, as the efficiency of
production and use of reagents typically falls with lower operating rates. Utilities are even less directly
related; for an HPAL plant operating well below product capacity, most of the physical equipment is
operating and consuming utilities.
Consider a model for a hypothetical HPAL
facility based on these principles. The
resulting operating cost is shown as the red
line in the figure at right. This model, with
a power-law relationship (Rate-0.75) fits
reasonably well with the industrial
experience; actual experience from four
large facilities from 2010 to 2019 (NB:
uncorrected for time and input/output
pricing) shows power-law relationships in
the range of -0.83 to -1.45 - the
dependence shown in the chart is lower
than actual experience. This is likely due to the higher maintenance and specialized services related to
solving significant operating issues at lower production rates.
Logistics and Raw Material Supply
These facilities require huge amounts of chemical reagents (≈25 tonnes limestone and ≈30 tonnes
sulphuric acid = 10 tonnes sulphur per tonne of nickel production), posing a logistical challenge that
could outweigh mining challenges for the long-term.
One concern with potential growth of this industry is long-term sulphur (and sulphuric acid) supply.
Most sulphur today is produced from desulphurization of fossil fuels (≈70%6). With sour heavy oil
demand likely to peak in the next few years, increasing evidence that at least some of the marine
shipping industry is going to comply with stricter environmental regulations by using sulphur scrubbers
or alternate fuels rather than desulphurized fuel oil7, and continually increasing demands for sulphur for
the fertilizer industry which already consumes the majority of global sulphuric acid to make phosphate
fertilizers, HPAL operations may face increasing long-term challenges8 on sulphur supply.
Perhaps sufficient supply will arise from increasing smelting of sulphide concentrates (copper, zinc,
nickel), and increasing shipments of LNG (only that derived from sour gas sources), but in the end it will
be hard to outbid the global need to eat. Alternatively, the world could re-invest in deliberately mining
and smelting pyrites, a high-cost sulphuric acid production route with its own environmental burden.

6
USGS Sulphur Yearbook, 2017
7
Maritime Executive.com, 2020
8
Argus Media.com, 2020

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Additional logistics challenges include the fuel for mine fleet and power generation. The latter is
projected to be coal-fired for many new operations; the Morowali industrial park where one of the new
facilities is being built already hosts over 1 GW of coal-fired power, with another 700 MW under
construction9. Fuel usage depends on whether acid is imported or produced on site, but a new HPAL
facility will consume ≈8 MWh/t Ni, which would consume about 3-4 t coal/t Ni10. For a facility with an
acid plant, net coal requirement is in the range of 5 t/t Ni, while with acid imports, net coal requirement
is ≈10 t/t Ni.
Responsible Sourcing Pressures
Environmental considerations will be an intriguing area to watch in nickel supply. Responsible sourcing
initiatives are proliferating11, and electric vehicle and consumer electronics companies are leading the
way in demanding better visibility, and ultimately better performance, on the practices around human
rights, environmental impact, and ethical behavior in their supply chains. Although this pressure
ultimately may not outweigh price issues, it is likely that increasing attention will be paid to sustainable
production of nickel.
Ethical Operations
This increasing vigilance may be negative for some HPAL facilities. Operations in countries with poor
corruption records (most current and projected HPAL facilities are in countries averaging a CPI12 score of
35) will draw increased scrutiny compared to traditional sulphide operations in Canada, Australia, and
Europe (average CPI score of 80).
Of course, sulphide operations exist in challenging locations as well; China and Russia have significant
nickel production and CPI scores similar to the laterite countries above, and a few current and projected
HPAL facilities are in more respected jurisdictions like Australia. Operations of any type can be run
ethically or not, but scrutiny should be more intense in low-scoring jurisdictions. Ultimately, it is up to
consumer-facing manufacturers to create an ESG value premium through their supply chain practices.
Air Emissions
HPAL facilities are large energy consumers, with the extent and type of fossil fuel combustion
dependent in part on jurisdiction and processing choice. Facilities with sulphur-burning acid plants have
a heat advantage due to the exothermic nature of sulphuric acid production but have typically suffered
from reliability issues – acid plant life is partly dictated by the number of startups, so process plant
reliability problems often cause acid plant problems. Facilities with more integrated heat balances (i.e.
increased flash steam recovery and reuse for process heat) also have a heat advantage, but also tend to
suffer more reliability issues. Consumption of limestone and lime adds a significant carbon dioxide
burden due to the decomposition of the carbonate. The newer facilities being constructed in Indonesia
are expected to be coal-fired, just like all new nickel pig iron facilities, with consequent high emissions of
GHG and air pollutants.
Based on the coal consumption noted above, emissions from electricity and steam generation are
estimated at 12-25 t CO2e/t Ni13. The lime/limestone burden from neutralization is estimated at 9-
13 t CO2e/t Ni produced, depending on flowsheet and extent of effluent/tailings neutralization.

9
Reuters, 2019.
10
Using 0.5 t coal/MWh per US 2015-2019 average electrical power production Tables 7.2b, 7.3b
11
i.e. OECD Due Diligence system, RRMI, IRMA, Res
12
Corruption Perceptions Index, a Transparency International initiative.
13
Coal at 100 kg/GJ, fuel oil at 77 kg/GJ, power plant efficiency 37%

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Production of hydrogen for the sulphide precipitation flowsheet adds a small additional carbon burden
of 0.4 t CO2e/t Ni due to the carbon emissions of steam methane reforming14, and mining adds about
1.8 t CO2e/t Ni15 for Scope 1+2 emissions in the range of 23-40 t CO2e/t Ni. Shipping of the large
quantities of reagents adds Scope 3 emissions to the flowsheet, but these are relatively small (estimated
to be <5 t CO2e/t Ni) in comparison to the direct impacts.
Combustion of fossil fuels and production of sulphuric acid at site will also produce hazardous air
pollution in the form of nitrogen oxides, sulphur oxides, and fine particulate matter, in proportion to the
processing rate and extent of stack gas cleaning employed. Emissions intensity will generally be higher
at lower operating rates due to inefficient use of reagents and utilities and degraded heat balances.
Tailings and Effluent
The tailings and water issues in the HPAL industry will remain a significant issue; although most
producers undoubtedly strive to be responsible, the practicalities of dealing with wastes in the range of
130 tonnes of chemically precipitated tailings and 200 m3 of effluent solution per tonne of nickel
produced remain daunting.
The nature of these tailings is unlike conventional mine tailings; they are largely fine chemical
precipitates from leaching (HPAL precipitates have an average particle size below 2 µm16) and
subsequent neutralization to remove acid and undesirable metals, with substantial dissolved salts in the
entrained solution. This slurry requires extensive tailings treatment and/or elaborate storage and
seepage control systems to prevent contamination. One major implication of the finer size is the slow
settling velocity and relatively easier ability to fluidize these materials. The figure below shows the
Stokes settling velocity for a range of particle sizes of interest in the nickel mining industry17. The
calculated very slow settling rates of particles in the HPAL precipitate size range (10-4 to 10-7 m/s) are
overestimates due to non-ideal particle size and solution viscosity and density difference. A settling
velocity of 10-5 m/s is approximately 1 m/d.

Australian facilities have a climactic advantage over other HPAL locations, with high evaporation rates
and abundant flat surfaces allowing effluent evaporation and precluding the requirement for marine
disposal of effluent as is practiced in tropical HPAL locations.

14
EPA, 2015
15
Nickel Institute, 2020 LCA; Ferronickel: Mining = 4% of 45 t/t Ni
16
Ang, C.A.; M.A.Sc. Thesis; University of Toronto; 2017.
17
Assumes spherical particles, non-hindered settling, particle density of 3,000 kg/m3 in ambient water

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In these tropical locations, not only is ocean disposal of effluent required, but land topography may also
lead to a push for submarine tailings disposal - which may be the only feasible approach in some
jurisdictions. We have yet to understand the tailings deposition plans of the new generation of HPAL
facilities in Indonesia; perhaps they will meet modern tailings management standards given the
increased focus since the recent tailings disasters in Brazil. Ultimately though, how will the increasing
challenges from sensitive consumers be met?

How do sulphide operations differ?

Sulphide ore treatment answers the three major challenge areas above differently.
Processing of mined ore by milling and conventional flotation is straightforward with no high-pressure
or high-temperature operations, resulting in an intermediate product that can be sold for further
treatment with high reliability and a lower process plant investment, significantly reducing risk. This
nickel concentrate is then smelted at global facilities. However, significant increases in nickel production
from sulphide mines will require investment in new nickel smelting and refining facilities or direct nickel
concentrate refining facilities, as will increasing production from HPAL facilities. This investment in new
facilities can be anywhere in the world, as shipping nickel concentrate is relatively inexpensive.
Reliability, Costs, and Freight
As the primary costs for a sulphide project are more directly related to throughput (mining, crushing and
grinding power and consumables, smelting and refining costs), there is substantially less dependence of
the operating cost on operating rate, as shown in the operating cost figure prior (green line).
Sulphide operations require small quantities of reagents for flotation, and replenishment of milling
media and liners, amounting to about 1 tonne of incoming materials per tonne of nickel produced, a
freight reduction of over 95% (with related Scope 3 greenhouse gas savings).
GHG Emissions
Overall carbon emissions are primarily related to fuel for the mining fleet and power plant, which
depends on ore grade and power supply. Many such operations can be grid-connected and rely on the
power grids of their jurisdictions, which can not only reduce logistical challenges but also carbon
footprint. Norgate and Jahanshi18 note that greenhouse gas emissions will be a critical sustainability
issue for the nickel laterite industry, as the emissions from laterite processing facilities (14.6 to
44.8 t/t Ni) are significantly higher than from sulphide processing routes (11.4 t/t Ni).
In Canada the carbon intensity of electricity production averages 0.1 t CO2e/MWh, about 10% of the
intensity of dedicated coal- or oil-fired electricity generation. In prospective nickel jurisdictions such as
British Columbia, Ontario, Quebec, and Manitoba, the power supply is even lower carbon; all are below
0.02 t CO2e/MWh19. Production of nickel concentrate with grid connected power can reduce the
carbon intensity of processing nickel ore to intermediate to below 0.5 t/t Ni, compared to >15 t/t Ni for
HPAL. Reduction of fuel combustion and reagent production reduces hazardous air pollutant emissions
as well as greenhouse gases.
Processing of nickel concentrate to Class 1 nickel still requires smelting and refining, which carry their
own GHG burden. The latest Nickel Institute life cycle assessment20 suggests an average smelting and

18
Norgate and Jahanshi; Minerals Engineering 24(7) June 2011.
19
Canada National Inventory Report, Part 3, 2019.
20
Nickel Institute, 2020 LCA; Nickel Metal: Smelting and Refining = 68% of 13 t/t Ni

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refining burden of <10 t CO2e/t Ni (≈80% smelting, 20% refining – note that further refining is also
required for HPAL nickel intermediates), on top of approximately 3.6 t CO2e/t Ni for mining and
beneficiation.
The availability of relatively inexpensive hydroelectric power, combined with the rising move to
electrification of mine fleets (trolley-assist, battery electric, hydrogen fuel cell) suggest that the mining
activity itself could become very low emission in certain locations in the near future. Regardless of these
innovations, Class 1 nickel produced from sulphide deposits is expected to carry less than half of the
GHG burden of that produced from HPAL facilities.
Responsible Operations
New sulphide operations in developed countries will be required to comply with stringent tailings and
effluent standards. Tailings from sulphide flotation are typically much coarser than HPAL, with particle
sizes in the 40-200 µm range giving orders of magnitude higher settling rates, greatly reducing the
potential for tailings to fluidize, and are typically clean of dissolved salts with only minor flotation
reagents potentially contaminating tailings water. Some mines will regrind concentrates in the process,
creating a very small amount of tailings in the 10-40 µm range.
Some sulphide deposits will have acid-generating tailings which must be well-managed to avoid
environmental contamination, while others like the large ultramafic deposits in Canada are typically not
acid generating. As a significant bonus, the tailings from these latter deposits are reactive with
atmospheric CO2, and thus sequester carbon dioxide, leading to potential carbon-neutral or carbon-
negative mining. Research into this topic21 continues to quantify sequestration potential based on
mineralogy, and to optimize tailings management practices for maximum CO2 sequestration.
For some deposits, the combination of low-carbon power grids, favourable mineralogy, adoption of
electrification in all aspects of processing, and optimized tailings management practices could well mean
the development of carbon-neutral, or even carbon-negative, mines. We are not there yet, but the
rapid evolution of the sequestration studies and mining equipment electrification suggest it is near term,
not distant future possibility.

Conclusions
Overall, the nickel industry needs massive new investment to achieve the increased production of pure
nickel products required to meet the electrification revolution. Most of the past nickel expansion of the
last 20 years has been in low-grade Class 2 nickel; ongoing expansion of this is required to allow the
stainless steel industry to reduce its use of Class 1 nickel, which should be used for the most stringent
requirements: batteries, alloys, and chemicals. The next wave of investment in Class 1 nickel is ongoing
with Indonesian HPAL projects today, but it is unclear if these will provide the desired low-cost, reliable,
environmentally-friendly operation.
The history of the HPAL industry is more failure than success; the chemistry works well but drives
challenging physical plant and supply problems. Reliance on this approach to solve the coming supply
crunch would be short-sighted; the total HPAL nickel production in 2018, representing investment over
25 years plus the original 1950s plant at Moa, was only about 200 kt nickel; on the order of 10 times this
production is required to be brought on line in the next 20 years. The historic value destruction of over
$15B created by just 4 large HPAL facilities has led to great skepticism in the market.

21
Power et al, Minerals 2014 4(2), for example

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There are no known unexploited great sulphide deposits (large, high-grade, in good locations). There
are deposits with good grade and tonnage in challenging locations (i.e. Kabanga in the Tanzania-Burundi
border area), small deposits that cannot satisfy the looming supply deficit, and large low-grade deposits
in favorable jurisdictions like Canada that, once in production, can continue to supply significant
tonnages of nickel for 30 or more years. These deposits include the Turnagain deposit in British
Columbia (Giga Metals), the Dumont deposit in Quebec (Waterton), and the Crawford deposit in Ontario
(Canada Nickel). These projects should offer better reliability, lower environmental concerns, and
overall better responsible sourcing ratings, but will still be expensive to build and operate. Continued
exploration may detect new large high-grade deposits, but even if this happens, the time to market for a
new discovery is over 10 years; we cannot rely on new discoveries to solve the coming supply crunch.
Today’s nickel prices do not incent future production by market-based resource companies. The
significant timeframes to develop new nickel projects into reliable commercial operations means that a
major shortfall in nickel supply is coming. The sheer quantity of new nickel production required will
mandate significant expansion in both the HPAL and sulphide production streams – with an expected
demand growth profile post-2025 of two world-scale (≈40 kt/y) plants per year. Neither route can be
counted on to meet the supply crisis alone, but the nickel sulphide production route in established first-
world mining jurisdictions appears more likely to provide long-term reliable operation, as well as greater
environmental standards and a much lower carbon intensity.
What is the solution to the coming supply crisis? Consumers and committed governments need to act.
Automobile companies, battery manufacturers, and governments with decarbonization commitments
need this nickel to be brought to market in a timely fashion, and need to invest in the resource
development now to ensure that sufficient, responsibly-sourced nickel is available to mitigate the supply
crisis, and available to them. Otherwise, some companies and countries will find that they cannot meet
their stated commitments, because their competitors have locked up the critical mineral supply.

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Glossary
Class 1 Nickel: nickel which meets the ASTM B39 specification (nominally >99.80% Ni)
Class 2 Nickel: all nickel products which do not meet the ASTM B39 specification, such as ferronickel
Concentrate: an intermediate product made by treating sulphide ore through grinding and froth flotation. Nickel
concentrate typically grades ≈10% Ni, with few deposits producing concentrate over 15% Ni.
Ferronickel: an iron-nickel alloy produced from the reduction and electric furnace smelting of saprolite ore.
Typically 20-25% nickel, it must meet the ISO 6501 specification of at least 15% nickel. For example, SLN 25 (20-
28% Ni, 1.2-2.2% C, 0.3-2.1% Si, Ni:Co = 35).
High-pressure acid leaching: a technology for dissolving high-iron nickel laterite ores with sulphuric acid in water at
temperatures ≈250oC, then separating the barren residue and neutralizing the excess acid in solution with
limestone before recovering valuable metals.
Limonite: the upper fraction of a laterite deposit which is high in iron (typically >35% iron). Typical limonites
contain 1-1.5% nickel, with moderate cobalt (10-20:1 Ni:Co ratio) and relatively low magnesium and silica.
Matte: an intermediate product made by treating sulphide concentrate through a smelting furnace (and further
processing) to remove silica and other impurities as slag. Nickel matte is typically >50% Ni+Cu+Co.
Nickel Pig Iron: an iron-nickel alloy which is not ferronickel only due to low nickel content, produced from the
reduction and electric furnace or blast furnace smelting of high-nickel limonite or low-nickel saprolite. Typically 8-
12% nickel, can be as low as 3-4% nickel.
Responsible Sourcing: programs designed to ensure that products are manufactured with low risks regarding
human rights (i.e. child labour, forced labour, working conditions, etc) and environmental protection (i.e. air and
water pollution, tailings management, global warming footprint, etc)
Saprolite: the lower fraction of a laterite deposit which is low in iron (typically <25% iron). Typical saprolites
contain 1.5-3% nickel, with low cobalt (20-50:1 Ni:Co ratio) and relatively high magnesium and silica.
Stokes settling velocity: the settling velocity for uniform spherical particles in a fluid medium. Real particles are
non-spherical and therefore have more drag and settle slower than Stokes velocity.

Disclosure: the author holds shares in Sherritt International Corporation, an HPAL and Class 1 nickel refinery operator and
technology provider, and has a consulting arrangement with Giga Metals, a junior exploration company advancing the
Turnagain nickel sulphide project.

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