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Editorial Coverage: Growth in demand for batteries is pushing
up nickel production around the world.
- Nickel is an essential component in batteries, including those
for cars and phones.
- Demand for metals is growing, especially in China, a major
battery manufacturer.
- Indonesia is the world’s largest nickel producer.
- The country is working to expand its manufacturing sector.
To view an infographic of this editorial, click here.
Pacific Rim Cobalt Corporation (CSE: BOLT) (OTCQB:
PCRCF) (PCRCF
Profile) is making the most of Indonesian nickel
through an aggressive exploration and development program there.
Ivanhoe Mines Ltd. (TSX: IVN) (OTCQX: IVPAF) has
announced mine development is underway at its platinum-group
metals, nickel, copper and gold Platreef Project in South Africa.
BHP Group (NYSE: BHP), the world’s biggest mining
company, is holding on to its Western Australia-based Nickel West
operations, based on a positive battery market forecast.
Glencore (OTC: GLNCY) mines nickel and produces
byproduct metals as a result of that production. One of the major
drivers behind the rising demand for batteries is car production by
companies such as Volkswagen AG (OTC: VWAGY),
which is building two additional plants in China to produce a total
of 600,000 vehicles on its dedicated battery-car platform.
Building Better Batteries
The past two decades has seen the demand for battery materials
surge upward. A host of electronic gadget and vehicles — everything
mobile phones, laptops and hybrid cars — are spreading around the
world. And each one relies on batteries for power, causing a spike
in demand for the minerals used in these batteries.
This flood of electronic devices has created an opportunity for
countries with rich nickel deposits, including Indonesia. By
reforming laws and opening up the industry to foreign investors,
these countries are seeing a boost to their economies and enjoying
a growing influence on the global stage. The growing demand also
creates promising potential for savvy companies that are willing to
seize the opportunity to mine the world’s mineral wealth.
The Need for Nickel
For mineral exploration companies such as Pacific Rim
Cobalt Corporation (CSE:BOLT) (OTCQB:PCRCF), there’s
never been a better time to focus on nickel. Two trends are buoying
up demand for battery minerals: green energy and high-tech
gadgetry. These two trends will undoubtedly only increase, ensuring
a shiny future for nickel companies.
People around the world today live increasingly connected lives,
thanks to the proliferation of electronic gadgets. From smartphones
to laptops to watches that track fitness, first-world consumers and
the rising middle class of the rest of the world are using portable
technology around the clock. The portability of these powerful
devices is made possible because of their rechargeable batteries,
which rely upon elements such as nickel to work.
At the same time, the push for environmentally friendly living
is also boosting the need for batteries. Electric and hybrid cars
are fueled by powerful batteries, batteries that are essential for
self-driving and driver-assistance technology. National energy
production networks, which increasingly use renewable energy to
reduce pollution, also depend on battery-power storage solutions to
see them through the ebb and flow of solar and wind power. Mining
companies such as Pacific Rim Cobalt are emerging as a vital
component in the creation of a cleaner environment.
For Pacific Rim Cobalt, this means continued development of
projects with the end goal of eventually producing cathode
materials such as nickel to meet growing demand. Though tensions
over President Donald Trump’s trade wars have softened metal prices
in the short term, longer-term needs are essentially immune to
presidential policies. Across Asia in particular, demand for
battery materials keeps rising, and the market’s long-term strength
seems assured.
Indonesia: A Nickel Powerhouse
To make the most of this market, Pacific Rim Cobalt has been
building its operations in Indonesia, the largest nickel-producing
nation in the world. With cobalt being a byproduct of nickel
production, Indonesia remains in the running to potentially become
the largest source of this critical battery mineral outside of
Africa.
Located in northern Indonesia, Pacific Rim’s Cyclops Project is the company’s current focus on
nickel operations. The project is in its early stages, with 20
step-out holes already drilled to gather information about the
mineral resources in the region. The company has just announced
(June 6) the commencement of Phase 2 drilling at Cyclops with a
goal of completing up to an additional 50 holes. Combined with
historical estimates, this information will allow the company to
establish a maiden compliant (NI 43-101) resource on the project
and determine how best to go about extracting those resources. Up
to this point, drilling has confirmed elevated nickel and cobalt
values, demonstrating a potentially highly profitable mining
site.
The Cyclops site was carefully chosen from among available
options in Indonesia. “The Cyclops Project was acquired following
extensive due diligence on over 40 projects across Indonesia,” said
Pacific Rim CEO Ranjeet Sundher. “We expect the near-surface nature
of cobalt and nickel mineralization at the Cyclops Project will
lend itself well to low-cost, logistically straightforward
drilling. We anticipate the opportunity to undertake a resource
calculation study, as well as ongoing metallurgy and process option
testing, will present itself in the near future."
The abundance of mineral deposits isn't the only thing that
makes Indonesia and, in particular, its north coast an attractive
place for nickel mining. It’s also location. Close to China,
Indonesia is in an ideal position to supply its neighboring
country’s huge battery-production market. Chinese batteries play an
essential part both in their home country’s embrace of modern
technology and in exports to the rest of the world. Chinese
companies are becoming leaders and innovators in telecoms and
electric cars, making this an important market for nickel
producers.
Good transportation links are essential to making the most of
mineral extraction. Whether it’s the solid road connections around
Pacific Rim Cobalt’s project or the maritime trade connections
between Indonesia and China, these dynamic elements ensure that
Indonesia — and the companies working within the country — can make
the most of its mineral resources.
Opening Up Markets
Indonesia, however, has set its sights on becoming more than
just a resource base. The country’s Industry Minister, Airlangga
Hartarto, has identified a bold agenda. The government’s plan is
to build Indonesia into a regional manufacturing
powerhouse, turning its own raw resources into consumer goods.
This strategic move could create even more opportunities for
companies already in the country, such as Pacific Rim Cobalt.
The government’s goal is not just a grand statement of intent.
Plans are afoot to revise labor laws and open up various parts of
the economy to foreign involvement. These moves are expected to
make the country even more attractive to investors, whose money can
drive the development of the manufacturing base.
The abundance of nickel ore will be one of the
draws for these investors. This rich resource will remain a
unique selling point for Indonesia, as manufacturing within the
country appears certain to reduce transport costs associated with
acquiring the mineral and allow greater efficiencies in the
end-to-end battery production process.
With ongoing demand from China and the development of strong
internal markets, nickel companies working in Indonesia almost
certainly will see demand for their products continue to rise. By
tapping into buried deposits, both Indonesia and the companies
operating in the country appear certain to profit. This promising
future is what companies such as Pacific Rim Cobalt are banking
on.
Pushing Up Nickel Production
Reports from Ivanhoe Mines Ltd.’s (TSX: IVN) (OTCQX:
IVPAF) Platreef project appear promising. The project’s
mining team delivered the first high-grade
mineralization from underground mine development to surface
stockpiles for metallurgical sampling three months ago. A total of
fifty grab samples yielded an average grab sample grade of 6.35
grams per tonne platinum, palladium and rhodium plus gold, as well
as significant quantities of nickel and copper.
Glencore (OTC: GLNCY), one of the world’s
largest diversified natural resources companies, has invested
heavily in mining for battery metals, including nickel. Producers
of some of the world’s purest nickel, Glencore relies on assets from Australia, Canada and Europe to produce its
supply of nickel. As a byproduct of its nickel production, the
company also produces byproduct metals such as cobalt and
copper.
The decision by BHP Group (NYSE: BHP) to keep
Nickel West was announced by BHP CEO
Andrew Mackenzie during a recent mining conference. “Nickel
West, which we will now retain in the portfolio, offers high-return
potential as a future growth option, linked to the expected growth
in battery markets and the relative scarcity of quality nickel
sulphide supply,” he said. Nickel West is a fully integrated
mine-to-market nickel business with all operations (mines,
concentrators, a smelter and a refinery) located in Western
Australia.
The hunt for battery metals is made more urgent by the work of
car manufacturers such as Volkswagen AG (OTC:
VWAGY), which began producing cars in China in 1984; the
company has become a significant presence in the country since
then. Opening two more plants in the country will likely place the
company in a strong position in the growing e-vehicle market. VW
plans to produce some 70 battery-powered
models across its 12 auto brands by 2028 and make 22 million
electric cars over the next decade. In addition, the Volkwagen
Group opened four new plants
in China last year. This growth should boost China’s burgeoning
battery industry along with the country’s demand for Indonesian
nickel.
As battery demand continues to grow, so will the world’s nickel
industry. And the companies involved in that industry appear
certain to benefit.
For more information on Pacific Rim Cobalt Corp., visit Pacific Rim
Cobalt Corp. (OTCQB: PCRCF) (CSE: BOLT)
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