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“There will be space in the market for both nickel cobalt manganese (NCM) cathodes and lithium iron phosphate (LFP),” Alfredo Santana, chief operating officer at Vale Base Metals, told Fastmarkets in an interview on Wednesday October 29.
His commentary comes in a scenario where there are some discussions in the market that nickel could be at risk of missing out on a central role, with NCM cathodes losing to LFP alternatives.
“The fundamentals are really bad,” one analyst source told Fastmarkets on the sidelines of the London Metal Exchange’s annual gathering last month. “Nickel’s use in batteries has slowed quite dramatically and LFP batteries are now almost 50% cheaper,” they said.
Global nickel supplies are abundant, with Indonesia now producing high volumes of the material. But the increase in availability has not been met by a substantial rise in demand from battery producers, sources said.
“Electric vehicles are making a strong impact, but the classic nickel market remains strong,” Santana said. “Nickel is also used in other activities other than battery production,” he added.
Currently, Vale supplies about 50-60% of the high-purity nickel into the aerospace and defense sector in the United States.
“At a higher-level, our strategy with nickel is to be in the lower half of the cost curve, which means improving productivity and effectively managing costs,” Shaun Usmar, chief executive at Vale Base Metals, also told Fastmarkets in an exclusive Q&A session in June 12.
By 2035, Vale Base Metals plans to double copper production to 700,000 tonnes per year as part of its copper production growth strategy, aiming to become a top-five producer of nickel and copper.
When it comes to copper, about 30% of our production comes from Canada, but the rest is based in Brazil. So there is a focus on Brazil.
For Santana, the copper market is strong. “It has a solid demand, it’s a solid market in general,” he said.
According to Santana, the low-carbon market for nickel and copper are maturing with the value chain decarbonization efforts.
“We want to lead the decarbonization process and investments are being made. We have a low carbon footprint — mainly due to our clean energy matrix in Brazil — and we are also looking at circularity. We continue to seek alternatives within the industry,” he said.
When asked about Vale’s intentions to increase its portfolio, he said the company is not thinking about it.
“We are focused on increasing our operational efficiency. Current portfolio is focused on copper and nickel,” he said.
“We have to see what fits best in the portfolio. Because if we try to be all things to all people, then we will not be successful,” Usmar highlighted to Fastmarkets in June.
Recently, Anglo American sold its nickel asset in Brazil, reflecting a long-term strategic shift rather than operational performance — Ana Sanches, the company’s chief executive officer in Brazil, told Fastmarkets in an interview on Tuesday October 28.
Fastmarkets assessed the nickel 4×4 cathode premium, in-whs Rotterdam at $320-400 per tonne on Tuesday, unchanged week on week.
Meanwhile, Fastmarkets calculated its copper concentrates TC index, cif Asia Pacific at $(66.30) per tonne on Friday October 31, up by $0.10 per tonne from October 24.
Santana highlighted three main challenges that Brazil is facing in terms of mining activity and what needs to be improved:
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