It is generally believed that lithium is an element that drives electric vehicles. However, Tesla (TSLA.US) CEO Musk pointed out that the term "lithium-ion battery" is an improper term, because the battery does not actually contain that much lithium. Musk explained at the shareholders meeting: "Although the battery is called lithium ion, the actual percentage of lithium in lithium ion batteries is only about 2%. Technically speaking, our batteries should be called nickel graphite because The main component of the entire battery is nickel."
Recently, Musk reiterated the importance of nickel, showing that Tesla is in urgent need of nickel. Musk said on Tesla’s latest quarterly conference call: “I want to emphasize again that any mining company, please mine more nickel and mine nickel in a large amount in an efficient and environmentally friendly way. If you are efficient in an environmentally friendly way To mine nickel in the ground, Tesla will provide you with a long-term huge contract."
However, due to various supply issues, it may not be easy to meet the anticipated surge in demand for nickel. In a recent report, Michael Beck, managing director of Regent Advisors, said that a "perfect storm" is brewing in the nickel industry.
Beck said: "A Tesla Model 3 battery contains about 30 kilograms of nickel. Nickel may be the most important single metal component in battery manufacturing. It is also a place to store all energy, and there are more and more battery chemicals. It is refined to allow as much nickel as possible. The more nickel, the higher the energy density of the battery."
Nickel prices plummeted in 2007, and there has been almost no development of new production capacity since then. In the past 12 years, no substantial investment has been made in new nickel production capacity. Global nickel stocks have decreased, and this situation is now coming to an end, and the increase in nickel demand has just begun.
In addition, the long delivery time for new nickel mines to be put into production is another constraint. The general manager said that it will take 7 to 10 years to develop a new nickel project. There will be a structural shortage in the next 12 years. Inventories in the next 18 months will drop to almost zero. There will also be an unprecedented surge in new demand for nickel.
For some people, all these factors add up to an increase in investment opportunities. Beck said: "In the field of metals, nickel is our favorite. We believe that in the next two to three years, nickel prices will rise sharply. With the emergence of shortages, this will be a necessary condition for the industry to obtain new investment."
So, which companies are ready to take advantage of the upcoming nickel boom? Perhaps Norilsk Nickel may be one of the larger established companies. The company is the second largest nickel producer. This may also be the best investment method for exposure to nickel. When the price of nickel rises, its stock price will rise accordingly. In addition, there are some smaller nickel exploration companies and emerging development companies are also preparing.
The general manager believes that in the next few years, there will be a shortage of nickel, and most companies with nickel business will benefit from it. However, there is another factor at play. Tesla and other electric car manufacturers are naturally eager to obtain their raw materials from sustainable sources. The industry has invested a lot of energy and money in cleaning up the cobalt supply chain. Musk's recent demands for nickel also clearly pointed out that mining of nickel must be carried out in an environmentally friendly way. (Recently, Norilsk Nickel Company has two oil spills in the Arctic region of Russia.)
Giga Metals, based in Vancouver, quickly responded to Musk's call, saying that it currently has an environmentally responsible nickel resource under development. According to related reports, Giga Metals currently has a project called Turnagain in northern Colombia, which the company said is one of the world's largest undeveloped nickel sulfide projects, and it also contains cobalt.
Martin Vydra, President of Giga Metals, said: "Our goal is to become the world's first carbon neutral mine. At the same time, we plan to use the BC Hydro clean energy grid. Although this will require more than other alternative energy sources. Expenses, but we think this is the right approach.” At the same time, Giga Metals CEO Mark Jarvis said: “If nickel is mined in an environmentally friendly way, you must consider sulfide deposits such as Canada and Australia.”
