Leading global nickel market analyst – “Demand drives the market from now on”

Macquarie Group consultant Jim Lennon yesterday addressed the Paydirt 2017 Australian Nickel Conference in Perth. Highlights of his presentation include:

  • Nickel prices generally higher since start of 2016; 2017 has been all over the place! (37% from low to high in Q3 2017)
  • Physical premiums improving, indicating a gradually improving market
  • Chinese stainless steel cycle and supply-side issues big drivers in price volatility this year
  • Increased Indonesian ore supply was a blow to market but offset by significant supply shortfalls from major non-NPI suppliers
  • China environmental clampdown could have a big impact from Nov 2017-March 2018
  • Batteries for electric vehicles are the “slow-burner” and will have a significant impact on the market in the 2020s –there is no imminent shortage
  • The reality of nickel: too much inventory after five consecutive years of surplus (over 500,000 t)
  • Over-stocking a China issue…Chinese imports surge as Tsingshan stainless plant starts in Indonesia.

He also notes that sulphide mine investments in Australia, Canada, Zambia (Enterprise) will largely be replacements for existing orebody depletion.

Enterprise (First Quantum), pictured, lies some 12 km to the north of First Quantum’s Sentinel operation in Zambia. Its processing facility will share the Sentinel infrastructure and tailings will be discharged to the Sentinel tailings thickeners and tailings storage facility.

Ores from Enterprise will be transported to the Sentinel processing facility, where they will be treated in a
SAG – ball milling circuit followed by flotation with a treatment rate of up to 4 Mt/y, Enterprise is being designed to produce an average of 38,000 t/y of nickel in concentrate with scope to increase to 60,000 t when nickel market conditions allow. The Enterprise circuit will also be able to process additional copper ore as part of Sentinel in the time periods when it is not being used to process nickel.

A dedicated primary crusher, crushed ore stockpile and conveying system will be provided for the Enterprise ores; crushed ore will be milled in a SAG and ball milling circuit, and the ground product floated in a circuit comprising talc pre-float, nickel rougher flotation, and two stages of cleaning. The talc pre-float will be operated without reagent addition to produce a talc concentrate containing very little nickel, which will be discarded to final tailings. Final concentrate at a grade of between 24 and 30% nickel, will be thickened and filtered in a dedicated concentrate handling facility.

The Enterprise processing facility will share all the Sentinel infrastructure and tailings will be discharged to the Sentinel tailings thickeners and tailings storage facility.