The study follows a non-binding term sheet with Samsung SDI for future offtake of battery-grade nickel and cobalt sulphate products in February 2024.

Australian project developer, Alliance Nickel, has announced the delivery of its definitive feasibility study (DFS) for its NiWest project. The study showed post-tax NPV of US$1Bn, with an IRR of 17.6% and 5-year payback period. Comparably, in the company’s pre-feasibility report published in 2018, the post-tax NPV was US$0.6Bn, with an IRR of 16.2%, and payback period (pre-tax) of 4.4 years. The higher NPV and IRR are mainly the result of an increased ore reserve from 64.9 Mt to 84.7Mt. As part of the report, processing life has also been increased from 27 years to 35 years, with an average nameplate production of 19.5ktpy Ni-in-sulphate and 1.5ktpy Co-in-sulphate. 

The NiWest project is located in central southern Western Australia, approximately 650km northwest of Perth, in an established mining area, where Glencore’s Murrin Murrin Ni-Co refinery is also located. The operation would be comprised of four deposits (Mt Kilkenny, Wanbanna, Hepi and Eucalyptus) with mining initially focused on the Mt Kilkenny deposit, extracting 3.2Mtpy of ore grading at 0.94% Ni and 0.06% Co. The pre-production CAPEX for the contingency and pre-stripping stands at US$1.1Bn. 

The nickel and cobalt sulphate that will be produced may well end up being sold to the US EV market where the project meets the requirement of the Inflation Reduction Act (IRA). Its project partners, Samsung SDI and Stellantis, have a battery manufacturing JV located in Kokomo, Indiana, USA. 

The NiWest project is one of a number of projects and refining operations tracked by Project Blue that comply with the IRA. The completion of the NiWest DFS offers a promising prospect for increased nickel supply outside Indonesia and China, which together accounted for over 70% of the global refined nickel supply in 2023. However, it remains to be seen whether the project will progress to full operational status.  

In 2023, IRA-compliant nickel refineries only supplied 11% of global nickel production, primarily originating from Canada, Japan and Australia. With the suspension of BHP’s Australian Nickel West operations in October this year, Project Blue expects this share will further decline to around 10%.