Nickel Surges on Indonesian Royalty Hikes and Strong EV Demand

Recording date: 14th March 2025
Elbows Up, Canada & The Nickel Market
What a difference 2 weeks makes – up $2,200 a tonne since we last spoke breaking out of range $15,000-$15,800 range that we’ve been in the last 3 months.  
Multiple reports of ore availability being tighter than expected this week – but first week since Chinese New Year didn’t see an increase in Indonesia ore price – but Indonesia talking about increasing royalty rates from 10% to 14-18% which will flow through to costs.  Though, Philippine ore prices were up $1/t and we continue to see NPI prices/stainless prices tick up each week in China which is supportive to nickel prices. This royalty rate change should underscore point I’ve been making that Indonesia wants to ensure it captures additional value from its finite ore resources. 
LME nickel inventories continue to move higher as refining capacity additions in Indonesia and China are allowing any surplus to be converted into LME deliverable units – this will ensure that final stage of “Great Compression” is completed.
While have seen significant increases in LME stocks – need to remember still low on weeks of inventory basis and still a fraction of reported surpluses over last 3 years  
In sharp contrast to year ago, EV sales looking robust – YTD February up 30% globally – China up 35%, Europe up 20% (with BEV up 29% and hybrid up 2%).  Is crazy how much negative hype last year when was just impact of Germany cancelling incentives which saw big surge in sales in advance in late 2023.  These numbers are now getting the benefit of low base in Europe – underlying numbers still growing at 20-25% ! 
Some interesting company news 
Talon Metals announced earn in by Lundin minerals to its Michigan properties where they’ve seen some excellent results.  Land package they picked up about 2 years ago.  Great move by both sides – keeps Talon from having to dilute its main property to explore and Lundin is running out of ore at its Eagle mill which is short distance away from this land package.   
Canada Nickel released more exploration results from the “Three Giants” – Mann West, Reid, and Midlothian – each have bigger geophysical footprint than Crawford.  Highest grades to date at Mann West, continued solid results at Reid, and good longer higher-grade intervals at Midlothian.
Chalice Resources had big news for PDAC – announced updated flowsheet – got rid of hydromet and making concentrates.  Nickel concentrate hydromet particularly for complex concentrates hard. Concentrates great – but will run into the “oligopoly’ if producing a Ni-Cu-PGM concentrate that has to go to one of the smelters. Doesn’t produce much nickel is really a PGM with Ni, Cu byproducts at this point. 
First Atlantic Nickel – awaruite property in Newfoundland – finally released some DTR results which were long overdue. Second hole yielded similar DTR grades to FPX – leading awaruite deposit. Explanation for long delay also in this press release as DTR results from first hole they drilled had much lower grades than FPX.  Ultramafic deposits typically have variability in mineralization and most importantly for these awaruite deposits need to look at grain size as FPX work showed change in recoverability based on grain size.  So interesting result, but a lot more drilling and mineralogy work to go.
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