Global nickel output is expected to drop by 7.4pc to 2.195mn mt in 2020, according to GlobalData. Disruption of mining activities due to COVID-19 pandemic and the advancement of Indonesia’s export ban are contributing to this decline. Indonesia’s mined nickel production is expected to fall by 15pc to 680,000mt in 2020. The country advanced a proposed ban on nickel exports from 2022 to 2020.
Outlook
Global nickel mine production is expected to recover at a CAGR of 4.2pc from 2021 to produce 2.638mn mt in 2024. Major producers Indonesia, the Philippines, Australia and Canada will contribute to the growth. Combined output of these countries is likely to rise from an estimated 1.415mn mt in 2021 to 1.638mn mt in 2024.
During the forecast period, new projects including Indonesia’s East Halmahera in 2021 and Aquila Nickel projects in 2023, and the Kingash project, Russia in 2024 are scheduled to commence operations.
In Indonesia, the export ban has adversely impacted nickel miners, who do not have integrated nickel pig iron plants as they are unable to sell to domestic smelters due to weak demand. Many miner have reduce or shut production during the first three quarters of 2020 and are expected to continue to reduce output in Q4.
Production in the Philippines is expected to drop by 9.3pc to 293,400mt in 2020, as miners struggle with the pandemic as well as harsh weather conditions. Philippines-based Nickel Asia and Global Ferronickel had to suspended operations at Surigao del Norte province in April due to the pandemic. Operations resumed by mid-May.
On the other hand, production in New Caledonia and Brazil are expected to increase by 6.9pc (cumulatively) in 2020. In Brazil, nickel production will increase due to the resumption of operations at the Santa Rita mine. The mine stopped production in 2015 amid low nickel prices. Production from Vale’s Goro nickel project in New Caledonia is also expected to increase.