NetworkNewsWire
Editorial Coverage: Demand for electric vehicle batteries is
pushing up production of nickel, especially in Indonesia, where the
government is moving to benefit from its natural resources.
One of the companies on the leading edge of this upward momentum
is Pacific Rim Cobalt Corp. (CSE: BOLT) (OTCQB: PCRCF)
(XFRA: NXFE) (PCRCF
Profile), which is setting out a bold expansion plan
following a successful exploration and development season in
Indonesia last year. Other companies with interest in nickel
production include Honda Motor Company Ltd. (NYSE: HMC)
(OTC: HNDAF), which will be looking for more nickel as it
increases its EV range. Tesla Inc. (NASDAQ: TSLA)
also continues to push the boundary for EV and has seen its stock
rise as the market grows. Toyota Motor Corporation (NYSE:
TM) (OTC: TOYOF) is moving into EV, with millions of
alternative fuel vehicles sold in the United States.
Panasonic Corp ADR (OTC: PCRFY) is working with
several of these companies to keep up the EV battery supply.
- Indonesia has 25% of the world’s nickel resources, ready access
to markets in China and Japan.
- Nickel is among essential minerals needed to produce batteries
for the growing electric vehicle market.
- The Indonesian government has established new regulations to
support this growing industry.
To view an infographic of this editorial, click here.
Electric Vehicles Spur Mining Boost for
Indonesia
In many people’s minds, electric vehicles (EV) are associated
with big cities in East Asia, North America and Western Europe.
These are major markets where new vehicles are making their
presence felt, particularly as environmentally conscious consumers
seek to retain their personal mobility while protecting the planet
from carbon emissions.
But the drive to put more EV on the roads is having a knock-on
effect in other regions. Indonesia, a giant in the production of
nickel, is seeing both its economy and its global status boosted by
the need for nickel in EV batteries. This shift could help turn the
country into an economic superpower, which may have significant
consequences for companies working there.
Expanding Indonesian Nickel Production
Among the companies developing Indonesia’s nickel supply is
Pacific Rim
Cobalt Corporation (CSE: BOLT) (OTCQB: PCRCF) (XFRA:
NXFE), a Canada-based battery metals company with
offices in Vancouver, Shanghai, Jakarta and Sentai, Indonesia.
Pacific Rim specializes in acquiring and developing
production-grade battery metal projects and is committed to
providing these critical metals to companies producing EV
batteries. The company has been working towards leveraging its
flagship nickel-cobalt Cyclops project by employing a vertically
integrated “mineral to market” strategy. Based in Papua Province,
nestled at the edge of the Cyclops Mountains, this operation is
based in a region rich with nickel deposits, where past operations
have confirmed the presence of the mineral.
The Indonesian government, which controls licensing to extract
minerals in the country, is aware of the growing interest in the
industry. Recently the government updated the mining registration
process, in part to encourage companies in this industry.
In light of the favorable government outlook and as a result of
its its ongoing efforts, Pacific Rim recently secured government approvals needed from the OMBUDSMAN
of the Republic of Indonesia for the Cyclops project to move
forward. The nickel and cobalt project has been found fully
compliant with the updated mining registration process, meaning it
is clear to progress.
Pacific Rim Cobalt CEO Ranjeet Sundher commented: “2019 was a
pivotal year for us, and we’re pleased to carry this momentum into
2020. Obtaining approval from Indonesia’s OMBUDSMAN is an important
step toward our goal of securing strategic partnerships and
participating in Asia’s growing battery metals supply chain.”
This milestone marker for Pacific Rim has been possible thanks
to the support and connections the company has established.
National, regional and local support has been found for the
project, which will provide jobs in Papua Province in mining,
transport and support services. With government approval in hand,
company officials have now begun discussions with potential
strategic partners and investors to further develop the
operation.
A Global Hub for Electric Vehicle
Production
Pacific Rim’s operation is well timed to tie in with plans of
the Indonesian government.
Indonesia aims to become a global hub in the EV industry supply
chain. Not only does the country have rich sources of nickel, it
also has direct nautical trade routes to China and Japan. These
powerful neighboring countries represent major markets for the
materials Indonesia is producing, thanks to Japan’s high-tech
consumer economy and China’s powerful battery industry. Vehicle
manufacturers in both countries are focused on becoming leaders in
EV, and for that they’ll need battery-grade nickel.
To make the most of this opportunity, Indonesian president Joko
Widodo has established rules to bolster the
EV industry in the country. Through a series of incentives, the
government aims to make EV 20% of its car production by 2025. This
movement has attracted investment from major EV players. Operations
such as the Cyclops project should play a critical role in making
that happen.
To support its plan to become a world-leading player in the EV
supply chain, Indonesia has stopped export of unprocessed nickel
ore. The government has also recently approved
environmental impact studies for the completion of several
factories designed to produce battery-grade nickel
chemicals.
With the Indonesian government providing support for nickel
production, and factories being established to process the
chemicals, Indonesia won’t just be a source of nickel-bearing ore —
it will become a major market for the base metal.
Ambitious Plans for Nickel
The Indonesian government’s ambitious plans for the country’s EV
industry are matched by the ambition of the companies working in
the region.
For Pacific Rim, this ambition is backed by the company’s
impressive exploration successes in 2019. Testing on its wholly
owned site revealed significant nickel and cobalt mineralization
near the surface.
These conclusions are based on several
successful operations in the second half of 2019. Excavation
and sampling of test pits produced 530 kg of sample materials,
which were sent to Canada for bench scale testing. Test results
indicate 75 drill holes, 51 augur holes and 11 test pits were used
to check mineral levels down to various depths. Combined with
historic results from 856 drill holes and 26 test pits, these
provide a detailed picture of the mineral profile at the Cyclops
site.
With these results in hand, Pacific Corp. has identified
ambitious milestones for development in 2020, including the
completion of a pilot plant in Canada and a demonstration plant in
Indonesia, which would produce battery-grade nickel and cobalt
material to suit the growing EV market. The operations and success
of these initial operations will be used to develop design criteria
for a full commercial scale plant.
A Growing Market
The demand for EV batteries means that demand for nickel is high
and looks set to stay that way. According to research by Deloitte,
EV sales reached 2 million units globally in
2018 and should reach 4 million units in 2020, expanding to 21
million by 2030. At the same time, the cost of EV battery packs has
been falling by 20% per year, making EV a more affordable option
for consumers.
CRU Mobility and Energy Futures has predicted that the EV market will need 1.3 million tons of nickel per
year by 2030, compared with 600,000 tons in 2018. This means
that demand for Pacific Rim’s products could more than double in
the next decade.
With Indonesia holding 25% of the world’s nickel reserves, the
country — and companies with operating inside the country — lies at
the nexus of these developments. Spending on new nickel processing
plants in the country is expected to reach $20 billion by 2024,
thanks to the government’s efforts to create a world-leading EV
supply chain. Companies such as Pacific Rim, with an early position
in the country’s nickel market, look to be ideally positioned to
profit from this.
The EV Nickel Market
The nickel market is increasingly defined by the car
manufacturers working in EV.
Honda Motor Company Ltd. (NYSE: HMC) (OTC:
HNDAF) is making big moves with EV and hybrid vehicles
such as the new Fit. The company is increasing its general levels
of car production, with a record-breaking year
in 2019 for production in China. Critically, Honda is looking
beyond the consumer market in its EV work, with a new research agreement with Isuzu to work on
heavy-duty trucks driven by electric fuel cells. This would expand
the need for EV batteries.
Tesla Inc. (NASDAQ: TSLA) is the name most
associated with EV. The company has played a leading role in
pushing the industry forward as well as in raising its public
profile. The company’s stated mission is to accelerate the world’s transition to sustainable
energy, which means moving transport faster over to EV. Through
intense R&D work, the company has pushed its cars
to ever greater mileage, while also developing other
battery-based projects, such as Megapack utility-scale energy
storage. The company’s recent stock-price growth reflects
increasing investor confidence in the EV sector.
Like other vehicle companies, Toyota Motor Corporation
(NYSE: TM) (OTC: TOYOF) is moving from traditional engines
towards EV. The company has sold more than three
million alternative fuel vehicles in the United States alone
and is now backing its electric vehicles with an extended-battery
warranty. The company also offers some of the most innovative EV on
the market, with its Mirai the first zero-emissions vehicle with a
range of more than 300 miles.
Panasonic Corp ADR (OTC: PCRFY) has entered the
vehicle market by providing batteries for car manufacturers. In
addition to its partnership with Tesla, Panasonic has established a
joint venture with Toyota to produce EV
batteries in China and Japan. The latter project is expected to
increase Toyota’s battery production capacity 50 times over,
bringing down the cost of individual batteries and significantly
increasing the demand for components such as nickel.
With EV production going through a period of dramatic growth,
nickel mining looks to be set for dramatic expansion. Nowhere will
this be more noticeable than in the government-supported industry
of Indonesia.
For more information on Pacific Rim Cobalt Corp., visit Pacific Rim
Cobalt Corp. (CSE:BOLT) (OTCQB:PCRCF) (XFRA:NXFE)
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