‘Mega project’ could drive electric future

Australia is on the brink of a “mega project” as trading partners seek reliable and ethical supplies of the critical minerals needed to build and run a clean economy.

The vast Kalgoorlie Nickel Project (KNP) in the Eastern Goldfields of Western Australia is one of many needed to satisfy demand for the vital ingredient, Ardea Resources CEO Andrew Penkethman said.

Nickel is vital for electric vehicles (EVs), and super-strong nickel alloys are also a key ingredient in geothermal, hydro-electric and wind power generation equipment.

“It’s not a competition between different companies,” the geologist told a nickel conference in Perth on Thursday.

“All resources need to be developed, particularly those in great operating jurisdictions like Western Australia.”

He said Ardea’s prospective “mega project” north of Kalgoorlie is the largest cobalt-nickel resource in Australia and the largest in the developed world.

European and North American car makers are increasingly looking for sustainable supplies from a trusted source in a sovereign supply chain that will free them from China’s stranglehold on critical minerals.

“The Chinese have really run a strong race. They’ve been planning strategically and they’ve been doing it for decades,” Mr Penkethman said.

“They dominate every aspect of the lithium-ion battery supply chain.

New United States laws would underpin future demand as the rest of world tried to catch up, and would make it harder for nickel exporter Indonesia, he said.

The recently passed climate laws provide tax breaks for reducing carbon emissions and require firms to prove what’s going into a battery before they can sell it.

“You can’t say their (Indonesia’s) production is either ethical or sustainable,” Mr Penkethman said.

Fellow ASX-listed nickel firm Centaurus Metals, developing the Jaguar Nickel Sulphide Project in the world-class Carajas Mineral Province in Brazil, also touted nickel as a growth story.

Managing director Darren Gordon said Centaurus was gearing up for an “electric future” in North America and Europe.

“The ability of us to be able to produce nickel sulphate on site and deliver it economically with a low emission footprint into those markets can’t be underestimated,” he said.

WA Mines and Petroleum Minister Bill Johnston told the conference in his keynote speech on Wednesday that Western Australia is primed to play a central role in decarbonising the world’s economies.

“Surprisingly, there’s more nickel in a lithium battery than lithium,” he said.

The nickel industry achieved sales of $4.9 billion in 2021/22, and is a major employer.

China remains the state’s biggest customer, accounting for more than two-thirds (64 per cent) of nickel exports.

But emissions-savvy Japan (16.7 per cent), South Korea (9.9 per cent) are also important buyers.

The minister welcomed OZ Minerals’ decision to build the $1.7 billion West Musgrave copper and nickel project, to be run on 80 per cent renewable power.

BHP’s Nickel West is extending its operations and Pure Battery Technologies plans to build a $460 million refinery in the Kalgoorlie region to convert raw materials into battery ingredients.

The Odysseus nickel mine, part of IGO’s Cosmos nickel project north of Leinster, mined its first ore last year and plans its first concentrate sales for mid-2023.

Ardea’s KNP was granted major project status by the federal government in March, unlocking official support for attracting investors.

“Deposits of this scale are a rarity,” Mr Penkethman said.

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