Anglo takes beachhead in one of world’s largest nickel sulphide deposits

Molten nickel matte is poured at the Vale Copper Cliff Nickel Smelter in Sudbury, Ontario. Photographer: Cole Burston/Bloomberg via Getty Images

ANGLO American is to buy a 9.9% stake in Canada Nickel Company which the UK group described on Wednesday as one of the largest undeveloped, bulk tonnage nickel sulphide resources in the world.

Anglo said in an announcement that it would also provide “technology expertise” and has the exclusive right to buy up to 10% of recoveries of nickel concentrate, iron and chromium contained in magnetite concentrates. It will also received any corresponding carbon credits from the Crawford project.

“If brought into production, the project is expected to play an important role in expanding the available supply of battery-grade nickel,” the group said. The investment was “part of Anglo American’s approach to expand its nickel product offering with additional battery-grade nickel for use in electric vehicles,” it added.

The nickel market is expected to be in surplus this year, according to a report by S&P Global, but in the longer term demand is expected to ramp up.

“Demand from the electric vehicle sector is ramping up, with higher proportions of nickel in the cathodes as it improves the energy density and means a better driving range,” said David Kurtz, director for mining and construction at GlobalData in January.

“However, nickel demand can potentially grow at a faster rate than electric vehicle battery production,” he said.