Power Up: How Green is your Nickel?
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July 25 -Andy Home, Senior Metals Columnist
Welcome to Power Up. The metals guy is back so today we’re taking a look at nickel, where surging production by Chinese-owned operators in Indonesia is forcing ever more Western suppliers out of business. This is a big dilemma both for automakers looking to source sustainable metal for their electric vehicle batteries and for governments looking to loosen China’s grip on critical minerals.
Also in today’s issue, how the U.S. states rank in terms of renewable power generation capacity, China’s record thermal coal imports and why natural gas is the big story in Venezuela’s presidential elections.
GREEN (AND NOT SO GREEN) NICKEL
BHP Group has spent $3 billion on its Western Australian nickel operations since 2020 with the ambition of becoming an environmentally responsible supplier of nickel sulphate for electric vehicle batteries. A supply deal with Tesla was signed in 2021.
Last month, however, the world’s largest listed miner announced it is placing the whole division on care and maintenance. Low prices have trumped green credentials.
Western nickel producers are being crushed by overproduction in Indonesia, where Chinese investment has driven a massive build-out in mining and smelting capacity to the point the country last year accounted for more than half of the world’s production.
Some Indonesian nickel is clean and green but much of it ticks all the wrong ethical boxes and comes with a high carbon footprint to boot.
What’s to be done? A growing number of Western mining companies and policymakers are proposing a two-tier pricing system, with a premium for sustainably produced battery metals such as nickel, cobalt and lithium.
Pratima Desai and Ernest Scheyder combine on this exclusive insight to gauge the potential for a new pricing structure to reflect the new market reality. Critical minerals are Ernie’s specialist subject and if you haven’t checked out his book, “The War Below”, you can find out more here.
The problem though, as I point out in this column, is that no-one is sure what actually constitutes “green” nickel.
ESSENTIAL READING
Which are the top U.S. states for renewable power capacity? Energy transition columnist Gavin Maguire runs the numbers and gives the rankings. California and Texas often grab the headlines, but several other states have developed far larger shares of renewable capacity within their utility-scale generation systems. Here’s the lowdown and, as ever with Gavin, you get a couple of great charts as well.
Wind power dominates generation capacity in the top ten U.S. renewable energy states but what happens when the wind doesn’t blow? National wind power slumped to a 33-month low on Monday, forcing power generators to crank up natural-gas fired plants. Gas, as Scott Disavino explains, is still what keeps the lights and the air-conditioners on despite massive investment in renewables capacity.
China’s coal-fired power plants generated 59.6% of the country’s electricity in the first half of 2024, the first time on record that coal has accounted for less than 60% of the power mix in the period. Gavin Maguire investigates the tectonic shifts playing out in the world’s largest carbon emitter.
However, even as China’s renewables capacity grows, the country’s appetite for coal imports is undiminished. Indeed, the country imported record volumes of thermal coal in the first half of the year. China’s import appetite may be about to wane, though, according to Reuters Asia commodities columnist Clyde Russell.
Venezuela hosts the world’s eighth largest natural gas reserves but came in a lowly 25st place in the global production rankings last year. The country flares off more unprocessed gas from its oil wells than it supplies commercially. Can Venezuela’s gas potential be unleashed? The question lies at the heart of the July 28 presidential elections. Reuters reporters Marianna Parraga, Deisy Buitrago and Mircely Guanipa take a deep dive behind the headlines.
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Editing by Marguerita Choy
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