Key Takeaways:

• Nickel is one of the key elements in lithium batteries.
• Because of the rise in the demand for lithium batteries and countries moving towards the renewable energy, the demand for nickel is also moving up.
• Like Tesla and many other companies producing electric vehicles, there has been a demand for nickel to meet the rising demand of lithium batteries.
• The rising demand can be an opportunity for ASX-listed players in coming days.

One of the most discussed topics at present is the rising demand for electric vehicles as countries across the globe are focusing on clean energy and reduce global warming. The segment has gained special attention with the rising demand for the components used in the manufacture of lithium batteries. Lithium, cobalt and nickel are key elements used in the manufacture of lithium batteries.

Nickel is considered as the key metal in lithium batteries. As the world is gradually moving towards renewable energy, the demand for batteries is going up to store energy.

Recently, Elon Musk has agreed to buy US$5 billion worth of Nickel from Indonesia. Recently, Tesla Inc also signed a deal with BHP under which BHP will supply nickel from its Nickel West asset in Western Australia.

Vandita Pant, the Chief Commercial Officer of BHP stated that the demand for nickel in batteries is expected to increase more than 500% over the coming 10 years. Other than this deal, Tesla and BHP will work together on energy storage solutions to look for chances to lessen carbon emissions in their respective operations via increased use of renewable energy along with battery storage.

As per various research articles available online, it was found that Australia ranks second after Indonesia in terms of producing nickel. Like Tesla, there are many players globally focusing on meeting the rising demand for electric vehicles. Keeping these facts in mind and the nickel production in Australia, we may expect to see growth in stocks of companies engaged in the nickel business

In this article, we will be focusing on nickel and discuss potential growth of nickel stocks on the ASX.

South32 Limited (ASX: S32)

South32 Limited is a diversified mining and metals company. It produces commodities including bauxite, alumina, aluminium, copper, silver, lead, zinc, nickel, metallurgical coal and manganese from its operations in Australia, Southern Africa and South America. Through its operations in Cerro Matoso in Columbia, the Company produces ferronickel.

In the June 2022 quarter, Cerro Matoso achieved a 22% growth in payable nickel production, in spite of unplanned maintenance and weather-related disturbances impacting the operation during H2 FY2022. Further, the payable nickel sales increased by 21% in the June 2022 quarter with inventories returning to normalised levels as shipping performance enhanced and the ferronickel market recovered from the disruption caused by a temporary rise in LME Nickel prices to formerly unseen levels.

Mincor Resources NL (ASX: MCR)

Mincor Resources NL is an Australia-based company that focuses on high-grade nickel sulphide production in the Kambalda district of WA with development of its Kambalda Nickel Operations. In March 2020, the Company completed a positive Definitive Feasibility Study for its nickel restart strategy, confirming the potential to develop a 5-year operation producing 63K tonnes of recovered nickel-in-concentrate with comparatively low capital intensity.

The Company recorded noteworthy operational milestones during the June 2022 quarter, with first production achieved under an enhanced off-take agreement with BHP, first ore delivered to BHP’s Kambalda Nickel Concentrator and first payment for nickel concentrate received.

Currently, the Company’s human resource planning is focusing on recruiting for OHS, mining engineering, geotechnical and geology roles as both project sites continue to increase production activities.

GME Resources Limited (ASX: GME)

GME Resources Limited is an Australia-based exploration and development company with nickel and cobalt interests in WA. Its principal asset is its 100% owned NiWest Nickel-Cobalt Project located beside Glencore’s Murrin Murrin Operation. The project is regarded as amongst the largest and highest quality undeveloped nickel/cobalt resources in Australia. The region is known for its nickel/cobalt production. It is well serviced with infrastructure like public rail connected to ports, gas pipelines, arterial roads, optic fibre communications as well as long-established mining towns.

During the June 2022 quarter, the Company completed an update to the cost estimates and price AU$/US$ inputs into the Pre-Feasibility Study of NiWest Nickel-Cobalt Project in WA.

Stock Performance:

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