FPX Nickel’s base case sees it producing a high-grade nickel concentrate for direct feed to the stainless steel industry

Vancouver-based FPX Nickel (FPX) has completed a pre-feasibility study (PFS) for its Baptise nickel project in British Columbia, Canada. The findings include an After-Tax NPV of US$2.01Bn and 18.6% IRR using a nickel price of US$8.75/lb (US$19,293/t).

The Baptise deposit sits within FPX’s Decar project and nickel mining uniquely comes from the naturally occurring nickel-iron alloy known as awaruite (Ni₃Fe), compared to the traditional sulphide and laterite deposits that are traditionally the main sources of primary nickel. Under a base case that will be developed in phases, FPX will produce an average of 59.1ktpy Ni-in-concentrate over a 29-year mine life that will feed directly into the stainless steel industry. In view of this, earlier this year, FPX closed a private placement financing with stainless steel producer Outokumpu worth US$16M.

The project, however, also includes the flexibility to further refine its nickel to target the EV battery sector. A portion of the nickel concentrate could be used to produce 40ktpy nickel sulphate as well as cobalt precipitate and copper concentrate products.

There is a real appetite for developing ex-China/Indonesia sources of nickel given that almost all growth in refined nickel supply over the last decade came from Indonesia. However, Indonesian nickel production is well documented to come with some of the highest carbon intensity in the market. This provides FPX’s Baptiste project with a strategic advantage given that it benefits from low-carbon power from the British Columbia Hydro provincial electricity transmission grid. FPX’s PFS additionally provides a conceptual project development timeline with first production nickel planned for Q4 2030, assuming no disruption. While offering an attractive, lower carbon intensity nickel product, the timeline for development demonstrates the dilemma that many OEMs face as the race to lock in nickel units over the next couple of years, in an accelerating demand environment, heats up.