Startup battery-grade nickel sulphate company Thakadu aims to capture a fifth of the world’s supply of the chemical, placing SA in an important position for such a strategic mineral.
Thakadu is nearing the completion of a R275m plant in Lonmin’s base metal refinery where crude nickel sulphate extracted from a platinum group metal concentrate will be pumped directly into the purification process, said Ruli Diseko, CEO and founder of the four-year-old company.
With a plant capacity of 31,200 tonnes a year, Thakadu envisions generating just 25,000 tonnes a year of class-one, battery-grade nickel sulphate, which fetches a handsome premium on the nickel price set on the London Metal Exchange. Nickel is trading at about $13,000/tonne.
Thakadu will be in steady state production from the third quarter of 2019, with commissioning starting in May.
Roskill, a UK-based research and consultancy firm, says the nickel sulphate market is “growing at double-digit rates and is likely to reach 970,000 tonnes contained nickel by 2030.”
“The rapid increase in demand, linked to the use of nickel in lithium-ion batteries used in electric vehicles, requires a rapid scale-up of investment in new nickel projects. But, with battery-grade material likely to require a higher incentivise price than the lower-grade nickel pig iron projects that have dominated much of the new supply targeting the larger stainless steel market, a major adjustment in prices and premiums appears on the cards,” it said.
Thakadu has a real advantage over these newcomers, because it does not need to build a mine, concentrator, smelter or base metal refinery. It is simply tapping in to Lonmin’s existing facilities that cost hundreds of millions of rand to install, something its competitors cannot easily replicate.
Thakadu will ensure Lonmin realises a much-improved price for its nickel than its now receiving, Diseko said. Thakadu is producing nickel in line with Lonmin’s reduced output of platinum group metals as it shuts old and unprofitable mines, but its plant can handle all the nickel coming from the base metal refinery operating at full capacity.
With 25,000 tons of nickel sulphate, Thakadu will become an important supplier to the global market and it will cement this position once Sibanye-Stillwater has taken control of Lonmin’s assets in an all-share deal.
Sibanye’s takeover of Lonmin, the world’s third-largest platinum producer, will be decided on Tuesday during the hearing of an appeal against the Competition Tribunal’s approval of the transaction.
Sibanye plans to put all its concentrate through the Lonmin smelters, base and precious metals refineries, which will allow Thakadu to ramp up to full production, Diseko said. There were alternatives to Sibanye’s nickel to top up the nickel purification plant to full capacity.
One of the tribunal’s rulings was that existing contracts had to remain in place in the merged entity, while Sibanye CEO Neal Froneman has as recently as last week spoken of the company’s next growth phase coming from battery-related minerals.
But Diseko has a broader vision than just the plant at Lonmin, wanting to secure a relatively small percentage of nickel output from Anglo American Platinum, Impala Platinum and Northam Platinum to replicate the plant and generate some 100,000 tons a year of battery-grade nickel sulphate, about a quarter of the future global supply.
Market projections show a supply deficit growing quickly from 2023 as demand outpaces available material.
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