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Critical Minerals and the inevitable rise in demand

Critical minerals are metals and non-metals that are considered vital for the economic well-being of the world's major and emerging economies, yet whose supply may be at risk due to geological scarcity, geopolitical issues, trade policy or other factors. Among these important minerals are metals and semi-metals used in the manufacture of mobile phones, flat screen monitors, wind turbines, electric cars, solar panels, and many other high-tech applications.

The minerals ranked as most critical by the United States, Japan, Republic of Korea, and the European Union including the United Kingdom, are as follows (ranked by Geoscience Australia based on synthesis of individual country rankings):

Rare-earth elements (REE), gallium (Ga), indium (In), tungsten (W), platinum-group elements (PGE) including platinum (Pt) and palladium (Pd), cobalt (Co), niobium (Nb), magnesium (Mg), molybdenum (Mo), antimony (Sb), lithium (Li), vanadium (V), nickel (Ni), tantalum (Ta), tellurium (Te), chromium (Cr) and manganese (Mn).

Geoscience Australia

Ardea’s Project portfolio is abundant with the key minerals which are sources of Ni, Co, Au, Sc and REE.

Nickel and Cobalt - Kalgoorlie Nickel Project including the Goongarrie Nickel Cobalt Project

  • Nickel and cobalt are critical components of lithium ion batteries ensuring high energy density and chargeability.
  • Higher nickel and cobalt levels in lithium ion batteries gives Electrified Vehicles greater range and faster recharge times.
  • The battery industry requires the metals specifically as soluble hydrated sulphates to be suitable for the cathode manufacturing process.
  • Purity of the sulphate product is key to produce high-quality batteries. PFS bench-scale sulphate production confirms that Ardea has the flowsheet to deliver highest-purity nickel and cobalt sulphate products.
  • The end products specification will cater to our customer needs and could include MXP (Mixed Hydroxide Products), MSP (Mixed Sulphide Products) or a cathode active material such as PCAM (Precusor Cathode Active Material).
  • Lithium ion battery usage is expected to increase markedly as Electrified Vehicle demand takes off.

Sc is expected to be produced as a by-product of the Ni and Co mining and processing at Goongarrie.

  • Scandium (Sc) is used in aluminium-scandium alloys for high strength, light weight aerospace industry components and for sports equipment such as bicycle frames, fishing rods, golf iron shafts and baseball bats.
  • Scandium iodide is used in mercury vapor lamps, which are used to replicate sunlight in studios for the film and television industry.

REEs are likely to be produced as a by-product of the Ni and Co mining and processing at Goongarrie.

  • Rare-earth elements (REEs) are used as components in high technology devices, including smart phones, digital cameras, computer hard disks, fluorescent and light-emitting-diode (LED) lights, flat screen televisions, computer monitors, and electronic displays.

Inevitable rise in demand of Nickel and other battery minerals

Demand for batteries is forecast to accelerate over the next decade as energy storage becomes critical to the transformation of energy systems.

Supply chain security issues and sourcing long term, reliable sources of sustainable and ethical nickel supply have continued to escalate and contributed to record nickel price appreciation. Nickel supply issues have been further exacerbated by rising geopolitical tensions around the tragic conflict taking place in Ukraine.

During the March 2022 Quarter, the nickel price reached a record high of around US$101,000 on March 8, prior to the London Metal Exchange (LME) nickel contract being suspended. Since LME nickel trading resumed on 16 March, the price has been consistently selling at levels above US$31,000 per tonne (the price in the current KNP financial model is US$19,500).

Demand for nickel continues to grow at record rates from traditional uses such as stainless steel and in particular from the rapidly growing Lithium-Ion Battery (LIB) supply chain for the Electric Vehicle (EV) sector where nickel is an essential component of high performance chemistry batteries (Figure above).

Current world battery grade nickel production levels cannot keep pace with demand. Even if every currently identified nickel laterite and sulphide deposit that can deliver sustainable and ethical mineral supply enters production. Without the development of significant nickel resources like the KNP, the EV revolution will be impeded and COP26 Glasgow climate commitments will be delayed.

With Ardea’s KNP hosting one of the largest nickel-cobalt resources in the developed world, 830Mt at 0.71% Ni and 0.046% Co (5.9Mt contained nickel metal, 380kt contained cobalt metal – ASX release 16 June 2021), Ardea is in the prime position to provide essential supplies of sustainably sourced nickel and cobalt, along with other Critical Minerals (notably scandium and the rare earth elements (REEs) neodymium and praseodymium).