Mixed Hydroxide Precipitate – The New Class 1 Nickel
The problem is that years of low nickel prices have hit Western Class I nickel producers and many of them have cut back or closed their doors. Over the past decade, we’ve seen Nicaro’s operations in Cuba, the eponymous Queensland Nickel mine, Votorantim’s SMP, and First Quantum’s Ravensthorpe nickel operations all shut down (with Ravensthorpe entering and exiting as the nickel prices dictated profitability).
The Goro operation in New Caledonia continued to operate but well below capacity, and the same is true for Ambatovy in Sumitomo in Madagascar. The result was that much of the Class I nickel (and high purity nickel oxide like that from Queensland Nickel, Nicaro and Goro) was taken off the market without any entirely new projects being made. put online to meet demand when it started to increase.
In response, battery makers began to work backwards, looking for new sources of nickel that would allow interchangeable substitution between metal briquettes, powder, and oxide. Crude forms of nickel sulfate (NiSO4) from platinum group metal (PGM) refiners, such as Sibanye-Stillwater and Impala, have seen payable nickel increase as demand increases. However, with the availability of this material being limited, the battery industry looked into intermediates that would behave similarly to nickel briquettes or nickel powder.
The options available were mixed sulphide precipitate (MSP), basic nickel carbonate (BNC) and mixed hydroxide precipitate (MHP). All of these are cheaper to produce than briquettes, powder or oxide because they are an intermediate in the manufacture of this product. In addition, they all sell at a discount to London Metals Exchange (LME) prices, as opposed to briquettes, which are deliverable to LME, and powders / oxides, which are generally priced at or above the LME depending on the application.
MSP, which typically contains 55% nickel, is produced by exposing high pressure acid leach solutions (HPAL) to hydrogen sulfide, which is a lethal gas. Ambatovy, Minara from Glencore, Moa Bay from Sherritt and Sumitomo Metals Coral Bay and Taganito all produce MSP. Finnish producer Terrafame also produces MSP from a heap leach operation.
Basic nickel carbonate is between 40 and 50% nickel. It was the intermediary of choice for Caron’s processing plants [which were energy intensive and relied on reducing gases to convert the laterite ore into one that could be easily leached in an ammonia solution allowing for recovery as BNC prior to refining into final product], however, these factories are now essentially extinct. It has also been produced in Queensland Nickel, Votorantim’s Niquelandia (Brazil), Marinduque’s Nonoc (Philippines), Nicaro and Punta Gorda (Cuba). Of these, only Punta Gorda is still in operation.
Of these three options, it was MHP that was quickly accepted because it behaves very similarly to nickel briquettes, powder or oxide in that it can be dissolved in the same equipment at same rates. True, it contains higher levels of impurities and other magnetic materials, but these can be removed with additional investment beyond current purification circuits. After all, these same contaminants are usually present in briquettes and so on, but in greatly reduced concentrations, so it’s just a rate-limiting issue.
MHP’s offer was also more favorable than that of its competitors. Ravensthorpe had decided to produce MHP because the refining was to take place at Queensland Nickel, which was already transforming basic nickel carbonate into nickel oxide. Nickel 28’s Ramu joint venture with China Metallurgical (MCC) was the second operation to begin manufacturing MHP, as it is much safer to manufacture than mixed sulphide precipitate (MSP). Gordes from Meta Nikel in Turkey was designed to manufacture MHP and is now operational.
As demand increased, producers responded quickly. Goro, now owned by Prony Resources, is focused on MHP production and Indonesia has announced that it is building five HPAL projects that will produce MHP with an estimated capacity of nearly 240,000 tonnes per year of nickel contained here. 2025, according to Australian Bank Macquarie.
In addition, two companies with major nickel sulphide projects recently announced that they will continue or produce MHP. The first is an Australian company called Blackstone Minerals, which owns a nickel sulphide mine in Vietnam. The other is Giga Metals, which has an advanced nickel sulfide project in Canada and has announced that instead of making concentrate, it will make MHP. Brazilian Nickel continues to search for high purity MHP / BNC in its Piaui project in Brazil.
What we have seen is that the MHP market is moving from an intermediate feed to a primary feed in the manufacture of rechargeable batteries. And it goes even further downstream. For example, cathode factories like BASF and Umicore are building their factories next to MHP producers and they will take the solution from the other side of the fence and fabricate cathode material directly from it to save on costs. shipping. This concept is strongly promoted in Canada, Australia and Indonesia as an integrated supply chain from mine to precursor / cathode.
MHP’s growing dominance makes their change of leadership an obvious choice. This is all the more true as the manufacture of MHP from sulphide or sulphide concentrate is much simpler, and therefore less expensive, than the manufacture from laterites, thus giving sulphide deposits an advantage in the race to take advantage of the growing importance of MHP.
What happened to the mat? In February 2021, Chinese company Tsingshan turned the global nickel market upside down by announcing that it would convert Class II nickel pig iron (NPI) to intermediate nickel matte using old but well-proven technology. The goal was to address the looming shortage of battery grade nickel.
However, nickel matte cannot be converted to nickel sulfate as easily as nickel powder, nickel briquettes, or MHP / MSP. Therefore, it requires additional investment from the nickel sulphate producers. True, nickel matte sells for a discount at the LME, as does NPI, however, the recent pricing of NPI has changed the economics of converting NPI to matte and suggests that matte production via this route will remain a low price. ability to swing depending on market conditions. The matte produced from NPI generates significant greenhouse gas emissions and goes against the requirements of original equipment manufacturers (OEMs).
Three years ago, nickel intermediates had no use in the market except to be refined into a chemical such as braiding grade nickel sulfate or into a metal that has entered stainless steel or stainless steel. alloys. They sold at a steep discount to the LME because the producers were happy to receive the going rate of 75% of the value of nickel. While MHP still sells below the LME, this discount has diminished and now stands at around 5-10%.
The number of new MHP operations expected during this cycle could increase global supply to around 400,000 tonnes, according to Macquarie. This number will compete with the availability of briquettes and powder, which of course are still used in traditional industries. And now that MHP producers recognize that they don’t have to make briquettes and nickel powder, they are selling directly to battery cathode producers. MHP prices may have increased, but their nickel content is still around 10% cheaper than buying briquettes and powder, and battery producers are currently negotiating long-term supply contracts and even investing in factories in Indonesia. MHP has truly become the new Class 1 nickel.
–Anthony Milewski is the President of Nickel 28 Capital (TSXV: NKL). The company has an 8.6% joint venture interest in Ramu’s nickel-cobalt mine in Papua New Guinea. In addition, it holds a portfolio of 13 nickel and cobalt royalties on projects in Canada, Australia and Papua New Guinea..