Horizonte looks to enter nickel, cobalt sulfate market with Vermelho deposit

Horizonte plc, which acquired the Vermelho project from Vale, is exploring whether the project can produce nickel and cobalt sulfate suitable for electric vehicle (EV) batteries, it said on Wednesday May 9.

Mining company Horizonte acquired the Brazil-based nickel-cobalt project for $8 million in December 2017.

“The Vermelho project also contains a large cobalt resource which Vale planned to process alongside the nickel, which gives Horizonte exposure to an additional commodity stream, in light of the growing interest in both cobalt and nickel for use in the Electric Vehicle battery market,” Horizonte chief executive officer Jeremy Martin said in December.

Vermelho is estimated to contain 1.6 million tonnes of nickel and more than 90,000 tonnes of cobalt, according to Horizonte. The project has a nameplate production capacity of 46,000 tonnes of nickel and 2,500 tonnes of cobalt.

“The next phase of work at Vermelho will focus on advancing the work that Vale completed as part of their Feasibility Study, taking the mixed hydroxide product (MHP) and upgrading to nickel and cobalt sulfate suitable for use in the evolving [electric vehicle] battery market,” Martin said.

Nickel and cobalt sulfate are crucial for manufacturing lithium-ion nickel-cobalt-manganese (NCM) and nickel-cobalt-aluminium (NCA) batteries used in EVs.

Should the project’s deposit be confirmed to be suitable for nickel and sulfate production, it could help alleviate a supply shortage expected in the coming years.

Demand for high-purity class 1 nickel, the grade used to produce batteries, may increase to 570,000 tpy by 2025 from 33,000 tpy in 2017, according to consultancy firm McKinsey.

Although the nickel price is being supported by the prospects of increased EV battery demand after 2020, there is also an anticipated supply squeeze in the near future because current nickel prices are not consistently high enough to attract enough investment for fresh nickel sulfate production.

Nickel’s three-month price on the London Metal Exchange has increased more than 10% since the start of the year, breaching the $15,000 per tonne level briefly in late-April.

Metal Bulletin’s cobalt high-grade free market price was $43.50-44.25 per lb on Friday May 4, up around 17% since the start of year.

Metal Bulletin launched its China cobalt sulfate price assessment last week to bolster coverage of the battery raw materials supply chain in response to the predicted EV boom.

The cobalt sulfate price, ex-works China, was assessed as discount of $0.63-0.93 per lb to the low-grade cobalt low-end price on Friday.

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