Outlook to 2030 on global production of battery-grade nickel with an assessment of key players and projects, as well as feedstock trends.

Analysis

Manager, Clean Energy & Transport

Janire Riobello

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Due to their higher nickel content, high-grade sulfide ores are typically used as the preferred feedstock for the production of Class 1 nickel, which is then upgraded into high-purity nickel sulfate suitable for batteries. However, in recent years there has been a growing tendency to increase battery-grade nickel sulfate production from mixed hydroxide precipitate (MHP) and mixed sulfide precipitate (MSP) intermediates produced from lower-grade laterite ores through a high-pressure acid leach (HPAL) process. In general, the nickel and cobalt yield of MHP is higher than that of MSP, containing up to 55% nickel and 4.5% cobalt content respectively, although current applications suggest an average nickel content of 38% in MHP intermediates.
In 2022, global battery-grade nickel sulfate production grew by 19.7% year-on-year, and is projected to increase by a further 10.6% in the full-year projection for 2023. Unlike the majority of segments of the EV supply chain, the battery-grade nickel market shows higher levels of geographical fragmentation although only three companies currently supply over half of global high-grade nickel. In 2021, Russia was the biggest supplier of high-grade nickel at a market share of 21%, although Stratas Advisors estimates that this share fell to 16.7% in 2022 as a result of globally disrupted supply chains. In 2023, Russia&rsquo;s market share could fall by a further 2 percentage points as logistics disruptions persist. However, Norilsk Nickel is expected to remain the leading nickel sulfate refiner through 2030 despite seeing significant market share losses.
The midstream nickel market witnesses strong levels of fragmentation, with global supply significantly shifting away from Russia to other markets, in particular Australia and Asia Pacific. While current market leaders remain dominant in the medium term, nickel sulfate refining sees a stronger penetration of new players than the cobalt market despite the complexity of the refining process, which also provides opportunities for niche players that specialize in certain aspects of the refining process. This reflects a changing pattern in the type of feedstock used, with sulfate production from sulfide deposits becoming less popular among smaller players which in most cases cannot easily secure access to high-grade ores, currently controlled by a small number of large mining companies. In contrast, high-grade nickel production from laterite ores offers an opportunity for smaller-scale production and higher geographical dispersion, leading to the emergence of MHP and MSP producers around the world. In fact, high-grade sulfide feedstock for battery-grade nickel production sees a steep market share loss by 2030, with MHP/MSP feedstocks registering a CAGR of 28.1% over the forecast period in nickel content. As a result, MHP/MSP feedstocks could potentially feed about 27% of global battery-grade nickel sulfate production by 2030. In terms of total nickel feedstock being allocated to battery cathode material, Stratas Advisors expects battery-grade nickel sulfate production to grow to account for almost 30% of the global supply of nickel by 2030.
This report is part of a series covering all segments of the EV supply chain, and contains strategic insights on growth projections and production trends across major markets and 40+ players, outlining key investments which help shape estimates on annual supply through 2030.
<img src="https://cdn.aglty.io/stratas-advisors/upload/02172023-Nickel_midstream.png" alt="Chart" />
Key takeaways:
<ul>
<li id="_com_1" language="JavaScript">Global supply of battery-grade nickel sulfate grows at a CAGR of 13.4% over 2022-2030, absorbing about 30% of global total supply of nickel feedstock by the end of the decade</li>
<li id="_com_1" language="JavaScript">Norilsk remains the leading nickel sulfate refiner through 2030, although supply shifts significantly from Russia to other markets, especially Australia and Asia Pacific</li>
<li id="_com_1" language="JavaScript">Investments in high-pressure acid leach (HPAL) plants reflect a tendency to increasingly replace high-grade sulfide feedstocks for cobalt and nickel intermediate products in the form of mixed hydroxide precipitate (MHP) and mixed sulfate precipitate (MSP), projected to account for over 27% of the feedstock used to produce battery-grade nickel sulfate by 2030</li>
<li id="_com_1" language="JavaScript">The growing shift from sulfide to MHP/MSP feedstocks offers an opportunity for smaller-scale and geographically dispersed market players, with new entrants reaching a market share of over 19% by 2030 </li>
</ul>

Battery-Grade Nickel Refining Market Assessment

<ul>
<li>Global supply of battery-grade nickel sulfate grows at a CAGR of 13.4% over 2022-2030, absorbing about 30% of global total supply of nickel feedstock by the end of the decade </li>
<li>Norilsk remains the leading nickel sulfate refiner through 2030, although supply shifts significantly from Russia to other markets, especially Australia and Asia Pacific </li>
<li>Investments in high-pressure acid leach (HPAL) plants reflect a tendency to increasingly replace high-grade sulfide feedstocks for cobalt and nickel intermediate products in the form of mixed hydroxide precipitate (MHP) and mixed sulfate precipitate (MSP), projected to account for over 27% of the feedstock used to produce battery-grade nickel sulfate by 2030 </li>
<li>The growing shift from sulfide to MHP/MSP feedstocks offers an opportunity for smaller-scale and geographically dispersed market players, with new entrants reaching a market share of 19.2% by 2030 </li>
</ul>
Due to their higher nickel content, high-grade sulfide ores are typically used as the preferred feedstock for the production of Class 1 nickel, which is then upgraded into high-purity nickel sulfate suitable for batteries. However, in recent years there has been a growing tendency to increase battery-grade nickel sulfate production from mixed hydroxide precipitate (MHP) and mixed sulfide precipitate (MSP) intermediates produced from lower-grade laterite ores through a high-pressure acid leach (HPAL) process. In general, the nickel and cobalt yield of MHP is higher than that of MSP, containing up to 55% nickel and 4.5% cobalt content respectively, although current applications suggest an average nickel content of 38% in MHP intermediates.
In 2022, global battery-grade nickel sulfate production grew by 19.7% year-on-year to reach an estimated volume of 326 KT, and is projected to increase by a further 10.6% in the full-year projection for 2023. Unlike the majority of segments of the EV supply chain, the battery-grade nickel market shows higher levels of geographical fragmentation although only three companies currently supply over half of global high-grade nickel. In 2021, Russia was the biggest supplier of high-grade nickel at a market share of 21%, although Stratas Advisors estimates that this share fell to 16.7% in 2022 as a result of globally disrupted supply chains. In 2023, Russia&rsquo;s market share could fall by a further 2 percentage points as logistics disruptions persist. However, Norilsk Nickel is expected to remain the leading nickel sulfate refiner through 2030 despite seeing significant market share losses from 31.1% in 2022 to 18.1% by 2030.
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Note: Total volumes and player estimates are based on existing and pending projects at an early or advanced development stage.
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Norilsk Nickel&rsquo;s operations in the Russian region of Murmansk Oblast account for about 86.6% of the company&rsquo;s total nickel sulfate output, with the remainder produced in the Harjavalta facility in Finland. With no expansions planned in Russia, Norilsk will maintain its position as the market leader thanks to the scheduled capacity ramp-up at Harjavalta, registering a 56.1% (+58.3 KT) increase in the company&rsquo;s total output by the end of the decade. While this volume increase will allow Norilsk to defend its dominance, the company&rsquo;s expansions remain significantly below those of key competitors. In particular, as the second-largest producer of nickel sulfate globally, BHP sees volumes more than double by the end of the decade with the expansion of its Nickel West Kwinana sulfate refinery in Western Australia, first commissioned in 2021. Vale SA, currently supplying 8.6% of global nickel sulfate, is expected to triple its output following the commissioning of the B&eacute;cancour refinery in Quebec, scheduled to come online by 2024. By 2030 however, Norilsk, BHP, and Vale SA see their combined market share shrink from 51.3% in 2022 to 39.3% as new and smaller players increasingly penetrate the market.
China currently holds 16.8% of global nickel sulfate supply, registering a market share loss of 3.3 percentage points year-on-year due to the strong expansion of midstream projects in Australia (+109% volume growth year-on-year) and Europe (+48.3% volume growth YoY). Huayou Cobalt, Greatpower, and Jinchuan are the top Chinese producers of nickel sulfate, accounting for a combined 10.5% share of global supply, or about 60.4% of domestic supply. While Greatpower and Jinchuan do not see any substantial additions from their refining facilities in Xiaoxian (Anhui province) and Jinchuan (Gansu province) respectively, Huayou Cobalt sees volumes more than triple over the forecast period as it plans to produce nickel sulfate in Bamo, Guangxi province, as well as in Gumi in South Korea together with top battery OEM LG Energy. Guoxuan High Technology Co. Ltd. is the only market entrant in China through the development of its Hefei refinery in Anhui, projected to account for 1.7% of global supply by 2030. However, with China lagging behind in the expansion of domestic nickel sulfate refining capabilities, the country&rsquo;s market share shrinks to 11.8% by 2030. Similar to cobalt refining, Chinese-owned assets witness a stronger growth overseas primarily thanks to Tsingshan&rsquo;s sulfate project in Bahodopi in Indonesia, expected to supply 6.6% of global nickel sulfate volumes by 2030 to become China&rsquo;s top producer. Despite a lack of major investments in the domestic market, China-owned refining assets defend their market share and actually register a slight increase to reach a 16.7% share of global supply, up from 14% in 2022.
Elsewhere in Asia, South Korea and Japan also account for a significant portion of global supply of nickel sulfate at a share of 14.8% and 7.3% respectively in 2022. As the biggest supplier in South Korea, LG Energy produces nickel sulfate at its Iksan and Cheongju sites, currently holding a 4.7% share of global supply. Following the commissioning of the Gumi refinery together with Huayou Cobalt, scheduled for 2025, LG Energy is expected to see volumes grow by almost 17 KT/year &ndash; though the growth of other players prevents market share gains, instead seeing a decline of 1.2 percentage points. POSCO&rsquo;s main nickel sulfate refining capabilities in Korea are located in the Gwangyang site in South Jeolla province, and the company plans to commission another refinery in the port of Pohang by 2024. Contrary to LG, POSCO actually sees a modest market share gain from 1.4% in 2022 to 2.2% by 2030. In Japan, Sumitomo is the only supplier of nickel sulfate produced at its Niihama site, which processes mixed hydroxide precipitate (MHP) produced in the Philippines. The company&rsquo;s biggest asset is located in Madagascar which, processing MHP produced on-site, currently supplies about 3.4% of global nickel sulfate volumes. With no major expansion plans in the pipeline however, Sumitomo&rsquo;s market position weakens significantly, registering a sharp market share decline from 5.6% in 2022 to 2.9% by 2030.
Australia&rsquo;s market position increased substantially in 2022 following the full ramp-up of BHP&rsquo;s Nickel West Kwiwana refinery and Glencore&rsquo;s operations at Murrin Murrin. In fact, in 2022 Australia reached a market share of 17.6% of global supply to become one the world&rsquo;s top battery-grade nickel suppliers. Australia will continue to consolidate itself as a key producer with the planned commissioning of fully integrated projects led by Alliance Nickel (NiWest), Cobalt Blue (Broken Hill), and Australian Mines Ltd (Sconi), which involve laterite ore mining, high-pressure acid leaching (HPAL), and refining capabilities. Alliance Nickel (previously GME Resources) plans to process MHP intermediates to produce about 20 KT/year of nickel sulfate at its NiWest project in Western Australia&rsquo;s North Eastern Goldfields, accounting for about 1.2% of global nickel sulfate supply, and for 3.8% of global HPAL capacity. Cobalt Blue&rsquo;s Broken Hill, scheduled to come online by 2025, is projected to account for 0.9% of global HPAL capacity, though its market share in global nickel sulfate supply remains limited at 0.2% by 2030. Australian Mines Ltd&rsquo;s Sconi project in Queensland, scheduled for 2024, plans to produce about 20 KT/year of MHP to process about 11 KT of nickel sulfate annually, or less than 0.2% of global supply. Queensland Pacific Metals&rsquo; TECH project will also process laterite ore to produce high-grade cobalt and nickel products through the Direct Nickel (DNi) process to upgrade New Caledonian ore, which is designed as a more cost-effective, energy-efficient, and environmentally-friendly alternative to traditional HPAL. By 2030, QPM is expected to account for about 1% of global nickel sulfate capacity. In addition to integrated HPAL/refining projects, Australia&rsquo;s production of battery-grade nickel is to be bolstered in the short-term by the addition of Cleanteq Sunrise&rsquo;s sulfate refinery in NSW to supply about 1.3% of global volumes by 2030. Towards the end of the decade, Poseidon Nickel could add over 72 KT/year of nickel sulfate to global markets upon the full commissioning of its Black Swan project in Western Australia. Thanks to the major investments flowing towards Australian battery-grade nickel supply, the country is expected to witness a CAGR of 22.3% over the forecast period to absorb almost one third of global supply by 2030.
Europe accounts for roughly 12.7% of global supply, with Finland absorbing over two-thirds of regional supply, followed by France and Norway. Norilsk Nickel and Boliden have been dedicating a part of total output to high-grade products in Harjavalta for over a decade, yet Terrafame&rsquo;s Sotkamo site commissioned in 2021 is the only facility in Finland fully oriented towards the global battery market. Following its expansion, Terrafame is expected to gain some market share to supply 2.9% of global volumes by the end of the decade, consolidating itself as one of Europe&rsquo;s largest suppliers, although Norilsk will remain leader by a considerable margin. With no pending projects in the pipeline, European supply grows primarily thanks to Norilsk expansion in Harjavalta, but the region&rsquo;s market presence falls significantly to a 7.2% share by 2030.
North American nickel sulfate production is concentrated in Canada, which currently produces 5.9% of global supply thanks primarily to the domestic refining capabilities of Vale SA. By 2024, Vale SA expects to add 25 KT/year to Canadian supply, with Electra Battery Materials (formerly First Cobalt) adding another 6.5 KT/year of nickel sulfate production from its facility in Sudbury, Ontario. Talon Metals is so far the only new expected entrant in the US market with commissioning of its Tamarack refinery in Minnesota scheduled for the second half of the decade. North America sees nickel sulfate volumes grow at a CAGR of 19.8% from 2022 to 2030 to reach a market share of 9.2%.
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The midstream nickel market witnesses strong levels of fragmentation, with global supply significantly shifting away from Russia to other markets, in particular Australia and Asia Pacific. While current market leaders remain dominant in the medium term, nickel refining sees a stronger penetration of new players than the cobalt market despite the complexity of the refining process, which also provides opportunities for niche players that specialize in certain aspects of the refining process. This reflects a changing pattern in the type of feedstock used, with sulfate production from sulfide deposits becoming less popular among smaller players which in most cases cannot easily secure access to high-grade ores, currently controlled by a small number of large mining companies. In contrast, high-grade nickel production from laterite ores offers an opportunity for smaller-scale production and higher geographical dispersion, leading to the emergence of MHP and MSP producers around the world. In fact, high-grade sulfide feedstock for battery-grade nickel production sees a steep market share loss from about 88.9% in 2022 to roughly 72.8% in 2030, with MHP/MSP feedstocks registering a CAGR of 28.1% over the forecast period in nickel content. Reflecting the major investments flowing towards the production of intermediate feedstocks produced from laterite ore, MHP/MSP feedstocks could alleviate supply shortages of battery-grade nickel in the medium term, potentially feeding about 27.1% of global nickel sulfate production by 2030, up from a 10.2% share in 2022. In terms of total nickel feedstock being allocated to battery cathode material, Stratas Advisors expects battery-grade nickel sulfate production to grow from a share of about 14.8% in 2022 to account for almost 30% of the global supply of nickel by 2030. &nbsp;