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Mike Beck: Battery Metals Part 3 – Nickel is the Next Big Energy Metal

Mike joins the show once again. This time to discuss the nickel story. He feels that electric vehicles will be a game changer for the market. Electric vehicles and battery demand will drive the need for the metal. The typical electric car requires over 35kg of nickel. This amount is likely to increase as cathode battery makers migrate toward higher energy densities. The more you can put into a battery pack the better the performance.

The entire market consumes two million tons per year which is a significant metal market. There are two grades of nickel class one and class two. Half of current mine supply is of the higher quality class 1 while the balance is class 2 which is of lower quality and often used for pig iron.

If you assume that E.V. will represent 15% of passenger vehicles by 2025, this means that the world will need an additional 60000 tons per year of class one nickel. Some estimates that by 2030 we will be at 30% then we are looking at over a million tons per year.

The mining industry will need to more than double existing mine supply. This is a big ask for a metal that is very capital intensive. The lead time for a nickel mine is six to eight years and usually has a lot of technical challenges. The preferred source for nickel is high-grade nickel-sulfide deposits, and they only represent 4% of known resources.

Nickel is a story that will increasingly emerge over the next few years. Stockpiles are being exhausted as electric vehicle demand continues. If you are patient with your capital, it is good to get positioned early.

Talking Points From This Weeks Episode

• No producer is going to expand production at current prices the price must double.
• Until now stainless steel has accounted for 75% of nickel demand.
• Class one nickel can only come from the low quality and high-cost deposits.
• He discusses nickel companies that have good exposure to a rising price.

Mike Beck is the founder and Managing Director of Regent Advisors LLC, a corporate finance advisory and investment firm. He has advised on equity and debt financings for private and public companies in the natural resources sector, including Signet Petroleum Limited, West African Minerals Corporation, Polo Resources Limited, Direct Petroleum Exploration Inc., Titanium Resources Group, Copper Development Corporation, UraMin Inc., Diamond Fields International Ltd., Weda Bay Minerals Inc., Regent Pacific Group Limited and CCEC Ltd.

Mr. Beck was a Managing Director at N M Rothschild & Sons with responsibility for the firm’s mining, oil and gas advisory and investment activities. Prior thereto, Mr. Beck was the founder and President of Librion Group Inc., a corporate finance boutique. He also was with the International Finance Corporation of the World Bank Group, where he oversaw the structuring and financing of a large number of natural resource projects in Africa. Mr. Beck has also been a founder or co-founder of a number of companies listed on the Canadian, Australian and London stock exchanges. He has an M.S. in Engineering from Princeton University and a B.S. (High Honors) in Engineering from Rutgers University.

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