AFRICA: Nickel role in the battery revolution

Fitch Solutions maintains its view that nickel will be the key beneficiary of EV adoption among the backdrop of other battery metals such as lithium and cobalt, supported by its dominant long-range capabilities.

With battery-grade nickel to remain in a deficit, its wealth of nickel deposits will position Africa to benefit from an uptrend in prices in the coming years. A high amount of nickel sulphide and potential access to value-added processing will further support Africa’s capacity to supply the battery industry.

African nickel production will rise in the coming years, with South Africa and Tanzania to benefit the most. Still, SSA will account for a small share of global nickel mine production.

High exposure to resource nationalism risks will pose challenges to project investment, while infrastructure delays will compound downside development risks, exacerbated by the recent passing of Tanzanian President John Magufuli. 

On April 1, Fitch Solutions in ‘Nickel: The Forgotten Battery Metal,’ discussed an anticipated uptick in nickel demand from the accelerated growth of electric vehicle (EV) adoption and the opportunities for Africa to benefit from the battery boom.

Despite the perception of nickel as a forgotten battery metal, Fitch Solutions expect nickel to remain intrinsic to batteries, especially those of EVs, due to its significant energy density which provides it an unparallel advantage to vehicle range and charging capacity. Nickel demand is set to be further bolstered as battery makers continue to minimise the proportion of cobalt metal in batteries.

Nickel To Outpace Lithium Battery Demand Growth

Acknowledging the growing application of lithium-iron-phosphate battery cathodes (LFP) in standard, mass-market vehicles, Fitch Solutions says the technology in LFPs will struggle to evolve to support higher performance vehicles. Nickel’s dominant range capabilities will keep demand anchored in large automotive markets such as the US and Canada where charging infrastructure will face long-term challenges accommodating more spread out populations. Automakers, such as Tesla will employ nickel-heavy batteries in commercial trucks and higher-end models. Moreover, LFP technology’s persisting performance challenges in colder temperatures will weigh on consumer sentiment.

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