Nickel and its significance for man

Nickel is a metallic element with atomic number 28, located in group X of the periodic table (heavier elements from this group are Palladium and Platinum). It is a silvery-white and glossy metal in its pure form, hardly corrosive and resistant to abrasion.

It is a microelement in the organisms of animals and humans which is included in many enzymes.

Its importance for modern man, however, is much bigger. Although discovered in 1751, it was already used by people of ancient times for the production of coins or jewelry and as an alloy of copper. As an alloying metal it provides very desirable properties to alloys in the steel industry such as hardness, durability, impact strength, toughness, heat resistance and finally resistance to acids and corrosion due to its physical and chemical properties. This makes it extremely important to many branches of energy, electricity and heavy industry. It is also the main ingredient of many chemical catalysts which causes it to be widely used in the chemical and food industry.

Since it is widely used today our daily life without it is difficult to imagine. Its most common application is as a component of stainless steel (next to iron and chromium). Such steel is the basis for the production of, among others, dishes, cutlery, household appliances, fittings as well as structural and protection elements in constructions.

Global nickel ore resources

Global nickel ore resources are in 2 main forms. The sulfide deposits which the metallurgy of Russia, Western Europe and North America is based upon were the main primary world’s source of nickel ore in the twentieth century. Currently they provide approx. 45% of the total nickel ore production with the main deposits in Russia (Norilsk-Talnakh) and Canada (Sudbury Ontario).

In recent years laterite deposits took over the main role in nickel ore production (about 55%) due to the shrinking and declining availability of sulfide deposits. The greatest resources of laterite deposits are in Australia, Indonesia, the Caribbean and Central America as well as the Philippines. It is estimated that laterite deposits contain almost 70% of the total global nickel ore resources.

According to the U.S. Geological Survey, the identified nickel ore land resources contain at least 130 million tons of metal and occur in layers of more than 1% of the total weight of the metal.

 

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The supply of primary nickel

Global primary nickel ore production (produced from ore) was approximately 1.9 million tons in 2014 according to the estimates of the International Nickel Study Group. The world’s largest nickel ore producers are Russia and Canada (from own sulfide deposits) where the mining is done by companies such as Norilsk Nickel and Glencore. Indonesia, Australia, the Philippines (from own laterite deposits) and China (from ore imported from those countries) play a leading role in the production of this raw material as well. The world’s largest projects of nickel ore mining from the laterite deposits include the project of Vale Indonesia on the island of Sulawesi in Indonesia (joint investment of Vale Corp and Sumitomo Corp) and the newly-started project of Koniambo in New Caledonia (investment of SMSP and Glencore Xstrata).

The advantage of the primary nickel volume produced from laterite ores becomes more obvious from year to year due to the ever-growing demand of the economies of Asian countries as well as due the limitations of mining sulfide ores which become less accessible. These ores are mined in open pits mainly in the South-East Asian countries, Australia and Oceania. The recent decade introduced very dynamic development of laterite nickel ore processing technology which turns it into an intermediate product of nickel and iron alloy (ferronickel) containing nickel from a few to more than twenty percent. The product occurs mainly in the form of ingots, commonly known as Nickel Pig Iron (NPI), and is a basic feedstock material for steel plants producing stainless steel consisting primarily of iron and nickel.

 

Global demand for nickel

The vast majority of the world’s primary nickel production is used in the steel industry for the production of stainless steel (approx. 65% of the total world production), alloy steel (5%) and non-ferrous alloys (12.5%). The large demand for this raw material is also generated by the electronic, electrical and chemical industries (battery production, corrosion protection, chemical catalysts, etc.).

The largest consumer of primary nickel is China which is responsible for about 45% of the total world consumption. China uses the vast majority of nickel for the production of stainless steel which makes it the world leader. Such a dynamic growth in China stainless steel production would not be possible without new steel technologies developed in the last decade. They enable ferronickel (NPI) production based on ore which is imported from countries of Asia and Oceania especially from Indonesia, Australia and the Philippines on a mass scale.

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Restrictions on the export of nickel ore from Indonesia

In early 2014 the government of Indonesia introduced a ban on export of unprocessed nickel ore from the country. Although this action was previously announced and preceded by the introduction of export duties in the earlier years, it was still a surprise to market participants and was one of the main reasons for a few months of trading increase of this important industrial metal.

Actions taken by the Indonesian authorities are part of long-term strategy aimed to organize and develop the mining market of raw materials. In 2009 the Indonesian Parliament adopted new laws which regulate mining operations in the country (Law No. 4 / 2009). The new mining law defined the rights and obligations of entities in mining operations from scratch and set forth in detail the competencies of the authorities licensing and regulating the industry. At the same time the permits already issued were reorganized whereas some were cancelled as their activities were conducted against the regulations.

The Indonesian long-term goal was to induce the companies operating in the mining industry to long-term commitment, greater processing of raw materials in Indonesia and export of processed production. The new provisions, some of which came into force only in 2014 (including the export restrictions of unprocessed nickel ore) resulted in the country’s significant decrease in mining of certain raw materials. In the long term, however, they will undoubtedly have a positive impact on the mining industry and the entire economy of Indonesia.