Nickel and the North
The bedrock of a sustainable future
Nickel prices have experienced significant volatility in recent years, with prices declining steeply from the highs observed in 2022, primarily due to an oversupply driven by Indonesia’s rapid production expansion. For Ontario’s miners and prospectors, these developments present both challenges and opportunities. The global oversupply and subsequent price decline have pressured profit margins, leading to operational adjustments. However, potential production cuts in Indonesia could stabilize prices, offering some relief, and a large pipeline of multi-billion dollar EV battery plants in Southern Ontario could offer new sources of demand for locally sourced, more sustainable nickel.
In 2023, 62,501 t of nickel shipments valued at over C$2.5 billion were produced in Ontario, totaling 59% of Canada’s nickel production by value, and the province is likely to retain its position at the top in 2024. The Brazilian mining giant Vale, alongside Glencore, is the nation’s dominant nickel producer and recently spun off its base metal business, Vale Base Metals (VBM), into a standalone entity. Unlike many producers in the region, VBM retains significant smelting and refining capacity, even milling and smelting ore for other producing mines in the region, such as KGHM International’s McCreedy West. “VBM has a significant mining complex in Sudbury and will be ramping up its US$2.94 billion expansion at Voisey’s Bay through 2026. We are also looking at investing in a nickel sulphate facility in Bécancour, Québec, with JV partners to meet the needs of our customers. When you have the vertically integrated platform, as we do, it allows us to offer a wider variety of products to our diverse client base,” said Shaun Usmar, CEO, Vale Base Metals.
With new leadership and a restructuring underway, VBM is focused on optimizing its significant asset portfolio and highlighting the value of its copper and nickel endowments, which were previously overshadowed by Vale S.A.’s giant iron ore business. “As for an IPO, we are using a notional three-year time frame. There is discipline that comes with being prepared for a possible IPO. There is no guarantee we will do one, but giving ourselves a three-year time frame to revitalize the business will allow us to revisit the idea with our two primary owners, Vale S.A. and Manara Minerals,” continued Usmar.
The provincial Ontario government also recently committed over C$7 million to 17 projects focused on advancing critical mineral research and development. One of which is EV Nickel, which received C$223,552 to advance bioleaching technology and design a pilot plant in Timmins to produce clean, high-grade nickel. By taking this approach, EV Nickel hopes to avoid the middleman and directly supply future battery plants in Southern Ontario. “Traditional nickel mining in Ontario involves sending ore to external smelters and refiners, which adds significant costs and reduces margins. In contrast, bioleaching allows us to achieve better recoveries, lower milling costs, and produce end-products tailored to the battery supply industry, such as mixed hydroxide precipitate (MHP) or nickel sulfate,” said Paul Davis, VP exploration, EV Nickel.
Fully funded for 2025, EV Nickel has an ambitious drilling program planned for its Shaw Dome project. With carmakers such as Honda and Volkswagen already breaking ground at their Ontario EV battery production facilities, juniors like EV Nickel are racing to capitalize on the impending boom in demand for locally sourced nickel. “Given the timeline for battery plant production in Ontario, we aim to secure partners to fast-track these projects and integrate them into the North American supply chain. We are seeking partners with the expertise to permit, construct and operate mines,” said John Paterson, EV Nickel’s Interim CEO.
EV and battery makers have been showing increasing interest in Ontario’s nickel mining sector, pouring in money and taking an involved role in the upstream to secure future supply. However, the government’s clampdown on Chinese investment in Canadian critical minerals has limited Canadian nickel miners’ ability to raise funds. “The bulk of the battery supply chain that is not Chinese is being supplied by various Korean companies, and there is a natural opportunity for strengthening ties between Korean manufacturers and Canadian raw material suppliers in terms of becoming strategic partners for those companies,” said Mark Selby, CEO, Canada Nickel.
Canada Nickel has been developing its large Crawford Nickel project near Timmins. Now in the second stage of the federal permitting process, the company is finalizing its front-end engineering design to position itself for an FID in late 2025. To achieve this, the company secured investment from Agnico Eagle and Samsung SDI, bringing in expertise from both upstream and downstream players. “Samsung SDI came in not only as a shareholder but with the option to buy 10% of the project for US$100 million. Having one of the world’s largest battery makers partner with us is a great endorsement of the work we are doing,” continued Selby.
In the Sudbury basin, Ontario’s main nickel production hub, Magna Mining recently acquired a portfolio of past producing mines and assets from KGHM International, including the producing McCreedy West copper mine. “These assets have been on our radar for a long time, and our team has extensive experience with them. The acquisition complements our Crean Hill and Shakespeare projects,” shared Jason Jessup, Magna Mining’s CEO.
To fund the development of its massively expanded asset portfolio, Magna Mining recently closed a C$22 million private placement, positioning the company well to develop its other projects in the Sudbury basin: “This financing will help us close the acquisition, and we expect to generate cash flow from McCreedy West. Our focus will be on reinvesting in McCreedy to increase production. While we may consider royalties or streams to fund Levack or Crean Hill, we are not looking at off-take agreements or bringing in partners at this time,” continued Jessup.
“Currently, there is uncertainty about where the nickel produced in Canada will be directed and, as it stands, Canadian manufacturers will need to import nickel to support their battery production.”
Kristan Straub, CEO Canada, Wyloo
Free of its non—core assets, KGHM International (KGHM) can now focus its attention on advancing its flagship Victoria project in Sudbury. “The Victoria project in Sudbury is particularly important for KGHM due to the unique mining ecosystem the region offers. Sudbury fosters strong synergies between companies such as Vale, Glencore and KGHM, which enables collaboration in production, shared infrastructure, and broader industry benefits. These partnerships significantly enhance the sustainability and efficiency of our operations, making Sudbury an ideal location for advancing the Victoria mine,” said Steven Dunlop, general manager - Canada, KGHM International.
Over the next few years, KGHM will focus on obtaining the necessary approvals and progressing with shaft sinking operations. The mine plan includes incorporating new technologies, including BEVs, to produce more sustainable nickel sulfides. “Mining camps in Sudbury are continually seeking efficient methods of metal extraction to maintain competitiveness on the global stage. Domestic production must focus on innovation and sustainability to counter the competition posed by low-cost nickel producers such as those in Indonesia,” continued Dunlop.
In Ontario’s remote north, the ‘Ring of Fire’ has long been touted as the next major mining destination, but bringing a project to production has remained elusive for a number of reasons, ranging from Indigenous and environmental concerns to a lack of road infrastructure. Nevertheless, the region continues to attract explorers from across the world, with Australian major Wyloo making progress on a feasibility study for its Eagle’s Nest nickel project. “This study will be crucial in determining whether we move forward into detailed engineering and subsequent phases. Our primary focus will be on engaging with First Nations, ensuring they are kept informed and involved throughout the feasibility process and beyond,” said Kristan Straub, CEO Canada, Wyloo.
Article header image courtesy of Vale Base Metals