Nickel has historically been utilized in alloys reminiscent of stainless-steel. Nevertheless, lately, rising demand for lithium-ion batteries has introduced consideration to its function within the rapidly growing battery sector.
In Australia, the nation’s largest nickel-mining shares are offering key assist for each markets.
Nickel noticed robust volatility within the first half of 2024 as Indonesian provide continued to flood the market, with some corporations curbing their manufacturing as the worth fell beneath the US$16,000 per tonne mark in February.
A broad improve in commodities costs in April and Might pushed nickel to a year-to-date excessive of US$21,615, however the base steel rapidly fell once more beneath the US$16,000 mark. Regardless of a lift previous US$18,000 in early October, as of December 17, nickel costs have been again all the way down to US$15,775 per MT.
Given the challenges for nickel in 2024, share costs for a lot of Australian producers have declined. With the long-term outlook for nickel being extra strong, there could also be alternatives for much less risk-averse traders to search out good entry factors to the Australian nickel sector.
Under are the 5 largest nickel shares on the ASX by market cap. Knowledge for this record was gathered utilizing TradingView’s inventory screener, and all values have been correct as of December 17, 2024.
1. BHP (ASX:BHP)
Market cap: AU$204.67 billion
Share value: AU$40.52
BHP is a diversified mining firm with headquarters in Melbourne, Australia. Worldwide, BHP runs dozens of mines that span North and South America and Australia. The corporate produces nickel sulphide ore out of its operations in Western Australia’s Northern Goldfields space. It covers the mining, growth and manufacturing of nickel till each matte and steel are able to be shipped to consumers. BHP sells over 85 p.c of its nickel to the electrical car (EV) business.
BHP is on its manner towards net-zero nickel manufacturing. In September 2022, its Nickel West division signed a deal with renewable power firm Enel Inexperienced Energy to start development of the Flat Rocks wind farm in Western Australia. The mission is about to incorporate 18 wind generators, and so they would be the tallest wind generators in Western Australia. As of October 2023, greater than half of the wind generators have been already in place. The primary stage of the wind farm is predicted to supply sufficient power to energy BHP’s Kalgoorlie nickel smelter and Kambalda concentrator as soon as full.
Within the operational evaluation for its 2024 fiscal 12 months, which ended on June 30, BHP reported manufacturing of 81,600 tonnes of nickel in the course of the interval, a 2 p.c improve in comparison with its 2023 fiscal 12 months. This got here in on the center vary of its 2024 steerage, which was set at 77,000 to 87,000 tonnes.
In October, BHP briefly suspended nickel manufacturing from its Nickel West operations attributable to oversupply and low costs, however will proceed to spend money on the positioning to allow a restart and assist. It would evaluation the choice by February 2027.
2. IGO (ASX:IGO)
Market cap: AU$3.79 billion
Share value: AU$5.09
IGO is a diversified miner that produces a number of completely different metals, however its focus is on its 100% owned Nova nickel-copper-cobalt operation. Nova is situated in Western Australia’s Fraser Vary and primarily produces nickel.
The corporate’s outcomes for its first fiscal quarter of 2025 present that nickel manufacturing from Nova got here in at 3,692 tonnes, down 42 p.c from the earlier quarter on decreased ore grades and a movement by means of to recoveries.
IGO’s different nickel manufacturing operation is Forrestania, at which operations have now been put below care and upkeep as of the December quarter. Forrestania put out 802 tonnes in Q1, down 36 p.c from the earlier quarter because of the sooner than deliberate closure of the Noticed Quoll mine following a significant seismic occasion in July.
IGO additionally has a 49 p.c stake within the Tianqi Lithium Vitality Australia three way partnership with Tianqi Lithium (SZSE:002466,HKEX:9696). The three way partnership has 51 p.c possession of Greenbushes, Australia’s largest lithium mine.
3. Nickel Industries (ASX:NIC)
Market cap: AU$3.78 billion
Share value: AU$0.84
New South Wales-based Nickel Industries, previously Nickel Mines, is a big producer of nickel pig iron, a vital element in manufacturing stainless-steel. The corporate started producing high-grade nickel matte for EVs in 2022.
Nickel Industries has 80 p.c pursuits in a number of nickel rotary kiln electrical furnace (RKEF) operations in Indonesia: Hengjaya Nickel, Oracle Nickel and Ranger Nickel within the Morowali Industrial Park, and Angel Nickel within the Weda Bay Industrial Park. It additionally has an 80 p.c curiosity within the Hengjaya nickel mine close to the Morowali Industrial Park.
Within the firm’s 2023 annual report, it reported that its operations set a nickel manufacturing document of 131,126 tonnes. This included contained nickel within the 834,192 tonnes of nickel pig iron it produced with a mean grade of 12.9 p.c nickel, together with further low-grade matte manufacturing of 119,822 tonnes grading 17.1 p.c.
In its June quarterly report, the corporate reported that it had introduced its curiosity within the Excelsior nickel-cobalt mission as much as 44 p.c, a rise of 30.25 p.c. The mission is presently below development and is predicted to commissioned forward of October 2025.
Nickel Industries September quarterly report highlighted that the interval was the corporate’s strongest quarter of the 12 months, throughout which it delivered “over US$100 million in EBITDA from operations, a key contributor to this robust end result was the document ore manufacturing and gross sales of just about 3 million wmt for the quarter from our Hengjaya Mine which delivered US$37.3 million in EBITDA.”
4. Centaurus Metals (ASX:CTM)
Market cap: AU$183.78 million
Share value: AU$0.375
Centaurus Metals is a mining and growth firm based mostly in Brazil. In response to the corporate, its objective is to develop into a significant provider of nickel sulphide to assist present a cleaner and greener future. The agency has its sights set on the event of its wholly owned Jaguar nickel-copper-cobalt mission, which is situated in Brazil’s Carajás mineral province.
On July 2, Centaurus launched a feasibility research for Jaguar forecasting an after-tax web current worth of AU$997 million with an inside charge of return of 31 p.c and payback interval of two.7 years from first manufacturing.
The next month, the corporate launched an up to date mineral useful resource estimate of 138.2 million tonnes at 0.87 p.c nickel for 1.2 million tonnes of contained nickel. This consists of measured and indicated assets of 112.6 million tonnes at 0.87 p.c nickel for 978,900 tonnes of contained nickel.
An underground scoping research is now underway on the high-grade nickel useful resource instantly beneath the feasibility research pit.
5. Ardea Assets (ASX:ARL)
Market cap: AU$69.89 million
Share value: AU$0.335
Ardea Assets is growing its wholly owned Kalgoorlie nickel-cobalt mission in Western Australia, which incorporates the Goongarrie Hub deposit. The corporate has stated the mission “hosts the most important nickel-cobalt useful resource within the developed world.” Ardea is presently working towards a deliberate definitive feasibility research (DFS).
A 2023 prefeasibility research for Goongarrie Hub exhibits an ore reserve of 194.1 million tonnes at 0.7 p.c nickel and 0.05 p.c cobalt, leading to 1.36 million tonnes of contained nickel and 99,000 tonnes of contained cobalt. The research signifies an open-pit operation with a 40 12 months life and annual output of 30,000 tonnes of nickel and a pair of,000 tonnes of cobalt.
In July 2023, the corporate signed a memorandum of understanding to develop Goongarrie Hub with a Japanese consortium consisting of Sumitomo Steel Mining (TSE:5713), Mitsubishi (TSE:8058) and Mitsui (TSE:8031). On February 29, Ardea shared that it has agreed with the consortium on a DFS funds and the scopes of labor for the research.
The corporate introduced on August 14, 2024, that it had been notified that the consortium had obtained approval from the Australian Overseas Funding Overview Board for its funding; it additionally obtained merger management clearance from the Korea Truthful Commerce Fee.
Ardea is presently working to provide definitive feasibility research for the Kalgoorlie mission, and offered an replace on its progress in its September 2024 quarterly report.
FAQs for nickel investing
What’s nickel used for?
Nickel has quite a lot of functions. Its important use is as an alloy materials for merchandise reminiscent of stainless-steel, and it’s also used for plating metals to cut back corrosion. As its title suggests, nickel is utilized in cash as properly, such because the 5 cent nickel in Australia, the US and Canada; Australian and US nickels are made up of 25 p.c nickel and 75 p.c copper, whereas Canada’s nickel has nickel plating that makes up 2 p.c of its composition.
Nickel demand is growing from EVs, the place the steel is a element of sure lithium-ion battery compositions; it has gotten additional consideration because of that goal.
Is nickel a superb funding?
Nickel’s function in EV batteries has seen it achieve elevated investor consideration. In reality, its value spiked to an all-time excessive in 2022, and it stays at ranges not seen in over a decade. For traders seeking to spend money on inexperienced metals, nickel could possibly be a robust selection, however everybody ought to carry out their very own due diligence to resolve whether or not it’s the proper portfolio match.
Tips on how to spend money on a nickel ETF?
Though there aren’t any pure-play nickel ETFs, some ETF choices so as to add the steel to your portfolio embody the iShares S&P/TSX World Base Metals Index ETF (TSX:XBM) and the VanEck Inexperienced Metals ETF (ARCA:GMET).
Alternate-traded funds (ETFs) could be a good possibility for traders preferring a safer strategy to investing in a sector. ETFs might be bought the identical as every other inventory, which implies you possibly can spend money on them utilizing inventory brokers and investing apps.
Article by Melissa Pistilli; FAQs by Lauren Kelly.
That is an up to date model of an article first revealed by the Investing Information Community in 2018.
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Securities Disclosure: I, Melissa Pistilli, maintain no direct funding curiosity in any firm talked about on this article.
Securities Disclosure: I, Lauren Kelly, maintain no direct funding curiosity in any firm talked about on this article.
