BHP boosts battery metals presence

UK-Australian resources firm BHP is aiming to become more involved in the battery metals sector by increasing nickel and cobalt sulphate production at its Nickel West operation in Western Australia.

The group was previously looking to offload Nickel West, which was seen as non-core to its international operations. But the rapid emergence and growth of electric vehicles and energy storage has led to considerable investment in new capacity.

Nickel West asset president Eduard Haegel outlined BHP's plans to boost production of nickel sulphate as well a producer of cobalt sulphate, at the Diggers and Dealers annual mining conference in Kalgoorlie. Nickel and cobalt are major ingredients in electric vehicle and energy storage batteries.

Nickel West, which comprises the Mount Keith and Leinster mines, the Kalgoorlie nickel smelter and the Kwinana refinery near Perth, produced a record 90,600t of nickel metal in the 2017-18 fiscal year to 30 June. After receiving all approvals, it is accelerating plans to produce 100,000 t/yr of nickel sulphate. BHP is considering a stage two expansion to around 200,000 t/yr, which will make it the world's largest producer. It is already the world's biggest producer of nickel powder and briquettes.

By the end of next year Nickel West expects 90pc of its nickel and cobalt sulphate demand to come from the battery sector, up from 70pc at the end of 2018.

High-quality nickel sulphate is being produced at a mini plant in Perth together with the Commonwealth Scientific and Industrial Research Organisation. Up to 100 kg/d of "on spec" nickel sulphate is being produced for customers at this facility, Haegel said. The production run has been completed with all input from the Kwinana refinery. Samples will soon be distributed to customers.

Although the major focus is on nickel sulphate, Nickel West is also aiming to produce cobalt sulphate because of its scarcity and high margins.

"Instead of removing cobalt, we have included cobalt as a cobalt sulphate," Haegel said. The final mixed sulphate will be "amenable" to an increase in levels of cobalt should cobalt solvent extraction test work be successful.

Nickel West's Mount Keith concentrator exceeded 40,000t of nickel in concentrate in 2017-18, the first time since 2010-11. There are plans to grow this to 50,000 t/yr through debottlenecking and underpinned by the Yakabindie satellite mining development programme and around 6.2mn t of nickel contained in the overall mineral resource.

The Leinster concentrator was affected by the closure of the Perseverance underground mine in 2011, with output dropping from 40,000 t/yr to around 17,000 in 2015. But production is back above 25,000 t/yr and there are plans to return it to 40,000 t/yr over the next few years.

But as Nickel West remains non-core to BHP's large-scale iron ore, copper and energy operations, some analysts said it could still be put up for sale if and when the price is right, taking advantage of its greater value in the battery metals era.