Just 18 months ago, the world’s biggest mining company was in a nickel frenzy. BHP Group, to much fanfare, had struck a deal with Tesla Inc. to supply it with the crucial ingredient for electric vehicles. It was about to go toe-to-toe with Australian billionaire Andrew Forrest for control of one of the globe’s most prospective mines.
Until recently, many of the industry’s biggest names couldn’t have been more bullish about the prospects for nickel. The once-boring metal, traditionally used to make steel stainless, is a crucial ingredient for electric vehicle batteries. A supply shortage stretching for years to come was forecast and mining companies jumped at a great opportunity to burnish their green credentials.
The scale of the collapse has left some in the industry questioning if there’s a future for most nickel mines outside of Indonesia. It’s also adding to concerns among US and European policymakers about China’s control over key commodities, with its companies leading much of the Indonesia’s production.
But even with production pullbacks starting to bite, they’re unlikely to provide imminent support to nickel prices, according to Allan Ray Restauro, an analyst at. He said, “The flood of supply from Indonesia is projected to continue to exert downward pressure on prices in 2024.” Producers such as BHP have instead trumpeted that buyers paying a premium for so-called green nickel would help lift prices. So far, however, there has been little evidence of that.