Tesla's Potential North American Battery Metals Supply Chain Contenders -- Nickel

Nickel supply is clearly Elon Musk's biggest concern as reported:


 * July 2020 - Elon Musk - “Please mine more nickel... Tesla will give you a giant contract for a long period of time if you mine nickel efficiently and in an environmentally sensitive way.”

I responded to this news with my article that focus on the "giant contract" and hence the majors. Tesla will need to deal with one of these to secure enough nickel. Nickel miners with larger scale nickel production are Norilsk Nickel, Vale SA [BZ: VALE3](NYSE:VALE), BHP Group Ltd. [ASX:BHP] (BHP), '''Glencore (OTCPK:GLCNF) [LSX:GLEN]. IGO Limited [ASX:IGO] (OTC:IIDDY)''' has a world class resource but would need to ramp up significantly and grow with Tesla. Of these 5, only Vale and Glencore have North American nickel mines, making them the favorites. They also have cobalt.

Below are some possible nickel juniors with North American projects who may win a Tesla nickel supply contract.

Talon Metals [TSX:TLO] (OTCPK:TLOFF)
Talon Metals has a JV with Rio Tinto in the good grade nickel-copper-cobalt Tamarack Project in USA. One of the better juniors with a chance to win a Tesla contract due to location and having nickel and cobalt and a strong partner.


 * Talon Metals Corp. President Sean Werger Talks With Matt Bohlsen Of Trend Investing

Nickel Creek Platinum [TSX:NCP] (OTCQB:NCPCF)
Low grade large scale Nickel Shäw suplhide project in the Yukon, Alaska, USA.

Giga Metals [TSXV:GIGA] (OTCQB:HNCKF)
Large scale low grade nickel project in Canada. Reported to be in talks with Tesla, but on September 11, Giga Metals stated "there is no material announcement forthcoming."

Giga is currently developing the Turnagain nickel-cobalt sulphide deposit in central British Columbia (Canada) with a goal of one day producing 40ktpa of nickel. The NI 43-101 compliant resource contains 5.2 billion pounds of nickel and 312 million pounds of cobalt in the measured and indicated categories, plus a further 5.5 billion pounds of nickel and 327 million pounds of cobalt in the inferred resource category.

Waterton (Private equity firm)
Large scale lower grade nickel-copper sulphide Dumont Project in Canada. Karora Resources Inc. (TSX:KRR) (OTCQX:KRRGF) (formerly RNC Minerals [TSX:RNX]) retained some small exposure in a recent deal.

Garibaldi Resources [TSXV:GGI] [GR:RQM] [LN:OUX6] (OTCPK:GGIFF)
Excellent nickel grades at their polymetallic Nickel Mountain Project in BC, Canada. An okay chance especially if they can prove up and grow the resource.

Canada Nickel Company [TSXV:CNC]
Low grade early stage large scale Crawford Nickel-Cobalt-Palladium Project in Canada. Has a chance.

Nickel Knowledge:

 * There are two types of nickel, Class 1 (sulphides) and Class 2 (Laterites).
 * Class 1, Nickel Is used in the manufacturing of Lithium ion batteries as it is a higher grade and concentration, which is perfectly suited to the process. Over the next 5-10 years demand will exceed the current production capacity of nickel sulphide deposits.
 * Class 2, Nickel is an ideal low-cost source for the stainless steel industry. Nickel laterite deposits are, in relative terms, abundant and located at shallow depths which makes them easier to mine.
 * “Nickel is primarily sold for its use as refined metal (cathode, powder, briquette, etc.) or ferronickel. Around 65% of Nickel consumed by the Western world is used to make austenitic stainless steel, 12 % goes into super alloys used in aerospace engineering and combustion turbines like those found in electric power generation stations. The remaining 23% of nickel is divided between alloy steel, batteries, foundry products, and coinage amongst other things.”
 * “In recent years, production of refined nickel decreased due to the fact that stainless steel producers in Asia shifted to lower cost nickel pig iron. So while mine production in countries that supply direct shipping ore to nickel pig iron operations increased, mine production supplying refineries tended to decrease. However, production of nickel chemicals nickel sulfate used in the production of batteries has increased.”
 * There has been a surge in demand for nickel sulphate in recent years. Global consumption increased by 28% in 2019, primarily driven by the electric vehicle (EV) market. And as the EV revolution gathers speed, demand for battery materials will accelerate.
 * Nickel metal hydride (NiMH) batteries have long been the preferred power train for hybrid EVs. However, the rise of full battery electric vehicles (BEVs) is likely to be accompanied by a growing preference for nickel-bearing LiBs, such as NMC and NCA technologies.
 * This doesn’t mean that all BEVs will be powered by batteries containing nickel – other types, such as lithium iron phosphate (LFP), will remain in use. But it does underpin a growing requirement for nickel sulphate.
 * Nickel sulphate is a product of primary nickel refineries but is also produced by dissolving pure nickel metal in sulphuric acid. Global production has expanded considerably in recent years, largely due to capacity expansions in China, Japan and Taiwan.
 * The Globe and Mail reported last Friday that Tesla is in talks with Giga Metals Corporation (OTCQB:HNCKF) (GIGA.V) to secure a supply of low carbon nickel in its Turnagain mine in British Columbia. The result was Giga flying up 185% on the OTC on over 10 million shares, an outstanding amount of volume for a 5-letter symbol OTC stock. The Turnagain mine has measured and indicated resources of 2.36 million tonnes of nickel.

Tesla (TSLA) in talks with Indonesia govt to build new nickel venture to secure some of the country’s nickel supply...... “It was still an early discussion and was not detailed yet. We need further discussion with Tesla”.....Indonesia is one of the world’s biggest nickel producers and this year, it is increasing its capacity by 46% year-over-year to 550,000 tonnes of nickel. It has also recently put a ban on exporting nickel ore in order to encourage the industry to process it locally. Therefore, if Tesla wants to secure Indonesia’s nickel, it would have to invest in processing it in the country.

Nickel News on July 22, 2021
BHP has agreed a long-term supply contract for class 1 nickel with one of the world’s leading electric vehicle (EV) and energy storage producers, Tesla.

Benchmark estimates that the contract is worth up to 18,000 tonnes of nickel per year starting in 2022.

It adds to two more nickel supply deals that Tesla has likely secured to lock up its expected demand from 2022 onwards with Prony Resources and Vale.

Tesla has acted early to secure significant volumes of nickel to fuel its lithium ion demand with cell partner LG Energy solution (LGES) for vehicles produced in China in the near term, and its own upcoming lithium ion battery cell production in Austin, Texas and Berlin, Germany.

Benchmark estimates that as of 2022 onwards 50% of Tesla’s lithium ion battery chemistry will be high nickel cathode (NCM and NCA). The other half will be LFP based chemistry, primarily focused around cell and vehicle production in China with cell partner Contemporary Amperex Technology Ltd (CATL).

On July 27 BHP reported: BHP makes recommended all-cash offer of C$0.55 per share for Noront."

Note: Noront Resources [TSXV:NOT] (OTCPK:NOSOF) is a Canadian-based mining company with their flagship project Eagle’s Nest. It is the largest high-grade nickel discovery in Canada since Voisey’s Bay. It is 100%-owned, high-grade, nickel, copper and platinum group element (PGE) deposit.