Speaking in a recent interview, Mark Travers said that the company is using heap leaching technology, a unique approach for nickel and in contrast to the more commonly used High Pressure Acid Leaching (HPAL) method. The first project to use the technology will be its Piauí nickel laterite project in Brazil.
“While heap leaching is common in a number of other commodities, particularly copper, it hasn’t been operated on a commercial scale for nickel with this type of nickel laterite ore body that exists at Piauí,” Travers said.
“Typically, you would see HPAL used for these laterites in Indonesia, and I certainly have experience with those in the Goro project in New Caledonia,” he told Fastmarkets, referring to the former Vale nickel mine that is now owned by Proxy Resources. Travers was formerly the CEO of base metals at Vale.
“We’re applying a process that we believe will allow us to unleash a new nickel response that can deal with the market challenges outside of the China-Indonesia supply chain,” he added.
Many nickel producers, particularly in regions with high costs for energy and labor, have struggled to cover the costs of production. But in lower-cost regions such as Indonesia, nickel production has continued to increase, putting further pressure on the rest of the market and leading western producers to cut production or curtail projects altogether.
The bulk of current Indonesian nickel projects have a Chinese and Indonesian shareholding base – normally Indonesian in the mining phase, and Chinese in the smelting/refining phases.
Travers said that the heap leaching process has a lower capital cost intensity and operational expenditure than HPAL, something that the company plans to demonstrate. The main strategy, he said, is to have a pipeline of projects to follow after Piauí.
“We’re almost ready to start construction at Piauí, and it’s the first of what we hope are a number of projects that will lead to Brazilian Nickel being a mid-tier nickel producer within a decade,” he said.
“We do have some other properties that we’re working on and some other opportunities we’re looking at,” he added. “The idea, though, is to get the Piauí nickel project started and then have a pipeline of projects at various stages to progress one after the other.”
Travers said that the company has identified some potential project targets after significant testing and has a very good sense of which would work. Many of these projects would normally be HPAL projects but are not viable due to the capital expenditure required in the current environment, he added.
Piauí, a former Vale property that Travers knows from his time with that company, was acquired by the founders of Brazilian Nickel in 2014. The current owners inherited Piauí with a tremendous amount of drilling completed, a resource defined, and a small pilot plant already built. The company then pivoted away using its own long-studied approach, to heap leaching, Travers said.
“Since 2014, we’ve gone through all the major stages, including completing the feasibility study in 2022,” he said. “We also built and operated a large-scale demonstration plant, much larger than you would see typically in mining, which ran for about 18 months.”
The pilot plant produced a low-carbon-footprint mixed hydroxide precipitate (MHP) product, derisking the full-scale project and resulting in the first sale of materials in 2022. The project is now fully permitted with the installation licenses, and TechMet – the company’s largest shareholder, with a stake of approximately 65% – has been very supportive, Travers added.
Financing remains biggest challenge
The biggest challenge, Travers told Fastmarkets, remains project finance, which Brazilian Nickel has been working to execute in parallel with getting the project ready for construction.
“While we’re making a lot of progress, it’s a tough market on the equity side,” he said. “You need someone who’s going to take a more strategic counter-cyclical view.”
Travers noted that large, diversified miners and other producers are not investing in nickel and are instead opting to curtail supply.
“This is where sovereign support is really an element that’s come to the forefront,” he said. “We are talking to people, but the real hope right now is that the gap will be partially or significantly filled by companies or countries trying to ensure that we participate in the supply chain.”
According to Travers, several European countries are now very concerned about their industrial base and supply chains and are creating sovereign critical minerals equity funds in response to this concern.
“Fundamentally, we have to create a project that’s low on the cost curve – and that’s what we’ve created,” he added. “So, our strategy is to position ourselves as the best project out there to build first.”
Travers was optimistic of interest from the US, which has talked of creating a sovereign wealth fund and is focusing on energy security and supply chains.
Brazilian Nickel also believes that it is an excellent candidate for the Brazilian critical minerals fund, an initiative that reinforces Brazil’s strategic approach to energy and supply chain security, Travers said. The fund is expected to be fully invested and ready to select projects this year.
“Brazil has really woken up to its potential on critical minerals – it’s no longer just about iron ore,” Travers said. “Government policy is very supportive of nickel in terms of the attention it gets, including the focus of the Mines Ministry and Agência Nacional de Mineração [National Mining Agency], but also in terms of the funding opportunities where the government would like to see Piauí developed.
“From our perspective, this is a great opportunity. The reserve-resource opportunities for nickel in Brazil are quite high, especially when combined with a comparatively more favorable implementation environment than other jurisdictions,” he said. “So, if you’re really trying to come up with a security-of-supply response to the China-Indonesia nickel domination, Brazil is a natural in terms of rising to the top.”
Offtake
Brazilian Nickel has a Memorandum of Understanding (MoU) on offtake with Königswarter & Ebell Chemische Fabrik, a wholly owned subsidiary of Pure Battery Technologies (PBT), which produces the precursor for nickel-based active cathode material (CAM) for use in electric vehicle batteries.
The deal will see Brazilian Nickel sell to PBT as much as 5,000 tonnes per year of nickel and about 120-200 tpy of cobalt in MHP.
“It’s a non-binding MoU, which we’re trying to move forward this year,” Travers said. “It’s an effort by Brazilian Nickel to work with burgeoning European supply chains. We’re aware of the turbulence in the European battery supply chain and we see a clear opportunity here, with good government policy support for cooperation.”
The company is also working on channelling offtake to the supply chain via various sovereign critical minerals funds, Travers said.
“It’s in both our interests, and it helps to advance that policy goal of strengthening the European supply chain,” he told Fastmarkets. “So, it was a good strategic fit and hopefully something that we could nail down in the second half of this year.”
Not all sovereign minerals funds will be looking for offtake, he noted. Brazil’s critical minerals fund will be an equity-only investment, for example.
Discussions with supply chain participants have meanwhile centered almost exclusively around the electric vehicle supply chain, Travers said. The goal is to exchange offtake for equity investment, he said.
“Our strategy is to commit most of our product to long-term offtake agreements, to support the overall funding and the security of the actual business proposition,” he added.
On the debt side, the company announced in December that US International Development Finance Corp (DFC) had expressed an interest in providing the company with a loan facility of as much as $550 million, representing almost 40% of the project’s overall financing package. Brazilian Nickel is now collaborating with DFC to convert this interest into a committed financing facility.
The heap leaching technology is a heavy focus of the technical due-diligence from lenders as well as potential equity investors, Travers said. The large-scale nature of the demonstration plant and the high-quality specifications of the product have been a positive factor in this, he added.
Growth opportunities
Brazilian Nickel will also look at opportunities outside Brazil, Travers said, noting that the company has a database of nickel laterite projects globally and has identified which would be a good fit.
“While Brazil is a natural push for us right now, we are very alert to other opportunities. Australia is one of those areas, for sure,” he said.
“Whether it’s New Caledonia or not, I don’t know. There are some issues that wouldn’t make it a priority right now,” he added.
Some ore bodies have proven challenging to existing owners for various reasons, he said, including the high-capex cost of HPAL technology, as well as declining grades and stockpiles that they have been unable to optimize.
“There are opportunities out there,” Travers said, “where our technology might be a good solution.”
Looming nickel deficit will see supply head off a cliff
A deficit in nickel outside the China-Indonesia supply chain is looming towards the end of the decade, Mark Travers, the chief executive officer of Brazilian Nickel told Fastmarkets in an interview.The situation will lead to a massive supply gap and necessitate a response sooner rather than later, he said.
“Our view is that supply is heading for a cliff. There’s an urgency there, so the more we deal with that cliff now, the better.
“So, whether that deficit in product is coming in 2028, 2029 or 2030, most people believe there is a cliff coming and you need a response,” Travers said.
Fastmarkets analysts forecast the nickel market to flip into a 39,000-tonne deficit in 2027, with increasingly large shortfalls each year thereafter. By 2034, Fastmarkets estimates an investment requirement for an additional 567,000 tonnes of nickel. Nickel was in a surplus of 164,000 tonnes in 2024, following a 179,000-tonne surplus in 2023.
The CEO of the UK-headquartered private company said the problem was being compounded by the fact that most Indonesian supply is committed to the Chinese mine owners under long-term offtake agreements.
“There has to be a strategy to secure that supply. It’s not going to just show up. You have to be a participant in it because it is committed,” Travers said, adding that there is no widespread consensus about a looming ex-China-Indonesia deficit.
“Nickel market experts say that when the belief comes that there is going to be a supply problem, then you see the response, which isn’t usually right at the point it happens, but it might be before. People have to believe it, and for some reason, there’s not [that] belief [right now],” he told Fastmarkets.
“It’s very hard for people to go to their boards and say, ‘let’s invest in a nickel mining company,’ and they say, ‘well, what’s the current market price? It looks like there’s lots of supply’. It takes a commitment that is both counter cyclical and strategic,” he added.
Indonesian nickel production
Indonesian nickel production has expanded significantly in recent years and nation in Southeast Asia is on track to account for an estimated 60% of global nickel supply by 2025 and 75% by 2030.
Travers’ previous role at Brazilian miner Vale meant that he was very close on a day-to day basis with Indonesia’s mining sector, with a ringside seat to the change in the mining law in 2009, ore export bans and the push to produce value-added product in Indonesia.
Indonesia has become more proactive in managing mine supplies in recent weeks, announcing policies that are generally less-accommodating for rapid increases in production and therefore exports.
According to Travers, this approach was much-needed – in part because current nickel prices do not incentivize nickel supplies outside of Chinese-owned supply.
“The Chinese are willing to subsidize increased supply at the current price, whereas no ex-Chinese company, or very few, are going to do so unless they have a counter cyclical view of the future,” he said.
“This means Indonesia is probably not getting its fair shake in terms of that price, in terms of accruing that value in [the] country, not just via processing, but through taxes, royalties and other opportunities,” he added.
At the same time, sustainable development policies are needed for the massive supply response that has taken place in Indonesia, Travers said.
“We’ve already seen high-grade material disappear and a rapid decrease in grades, and unless something changes, it’s going to continue to happen. So, there is a need for a policy response from Indonesia, in my view,” he said.
According to Travers, industry analysts estimate that, at the current pace, Indonesia could exhaust its high-grade nickel in less than two decades.
“You certainly cannot say that’s in the interests of Indonesia,” he added.
Similarly, he said, the country needs to better manage its labor and environmental conditions for the betterment of communities, with a huge divergence of standards across Indonesia’s operations.
Many western producers have been promoting the concept of green nickel premiums, pointing to high environmental, social and governance (ESG) standards. But Travers said he had seen no commitment in the market to paying green premiums.
“In the end, what we and others need to get nickel projects off the ground are long term offtake commitments. While you might get a little bit of a green premium on material compliant with the [US] Inflation Reduction Act (IRA), or for the ESG. We haven’t yet seen that adjustment,” he said.
“My understanding is that there are some price differences in the fine terms between a product that might be very high carbon [and] low ESG, and the cleaner products that are IRA compliant. But there’s not a lot of IRA compliant material out there,” he added.
Under the IRA, companies that have a more than 25% ownership or control by a foreign entity of concern (FOEC) – including board seats, voting rights or equity – would not be eligible for the tax credits available under the IRA.
With FEOC nations being China, Russia, North Korea and Iran, that pretty much removes the majority of nickel being produced in Indonesia, because it has a Chinese shareholder base.
Demand for nickel could reduce
On the demand side, Travers said he was unfazed by a trend toward nickel-free lithium iron phosphate (LFP) and lithium manganese iron phosphate (LMFP) cathodes could result in reduced nickel consumption.
“There’s a place for LFP and there’s a place for nickel-rich batteries,” Travers told Fastmarkets. “We’ve certainly seen that China is way ahead in both the EV adoption curve as well as in pushing LFP batteries,
“We ultimately believe the adoption curve will rise in other areas as well, and there will be a strong need for nickel batteries too,” he said.
Travers also said that nickel’s use in stainless steel remains strong and will continue to strengthen going forward.
“So, fundamentally, we believe nickel demand will settle in a very good place, and you still end up with a market that’s in a deficit in the coming years,” he added.
Fastmarkets forecasts primary nickel demand to grow at a compound annual growth rate of 4.5% between 2023 and 2034, with growth in demand driven primarily by the batteries sector, followed by the stainless steel industry.
In Hotter Commodities, special correspondent Andrea Hotter covers some of the biggest stories impacting the natural resources sector. Read more coverage on our dedicated Hotter Commodities page here.
