Jul 31, 2020
Timmins firm aims to be major supplier as global demand for nickel grows
4 Lecture minimum
CEO envisions local operation as major supplier
Initiative reporterAndrew Autio,
Published on: July 30, 2020 | Last
An emerging mining company could become a major supplier to the global electric vehicle market if its projects in Timmins come to fruition.
This week Canada Nickel Company announced the creation of a wholly-owned subsidiary called NetZero Metals Inc. which will begin research and development into a processing facility to be located a short drive from the city. The goal of this facility will be the production of zero carbon nickel, cobalt, and iron products.
Canada Nickel Company had been planning this since February, and two weeks ago, they initially decided to make it public and announce last week. However, they opted to hold off a few days, which worked out in their favour, as a global giant in the electric vehicle business put the world on notice.
“On the Wednesday evening, Tesla had their quarterly conference call, and basically laid out the business case as to why this is necessary, very clearly,” said Mark Selby, chief executive officer for Canada Nickel.
Tesla CEO Elon Musk essentially said more nickel is needed now, not later, and that he is willing to pay big bucks for it, with a few strings attached.
“Tesla will give you a giant contract for a long period of time if you mine nickel efficiently and in an environmentally sensitive way,” stated Musk.
Of course, Selby and his colleagues were watching very closely.
Musk’s remarks “acknowledges the fact that there’s very few projects ready to go, particularly outside of Asia,” said Selby.
Musk also emphasized the terms “environmentally friendly” and “environmentally sound.”
Selby said, “’A’, it’s the right thing to do, but ‘B’ it’s a big issue in the nickel industry, that’s really not getting as much airtime as it should. One hundred per cent of the supply growth in nickel over the last five years has come from nickel pig iron plants in Indonesia.”
“Nickel pig iron” is a lower grade ferronickel invented in China as a more cost-effective alternative to pure nickel for stainless steel production and other processes.
“The issue with ferronickel and nickel pig iron is that it’s a very energy intensive business. It uses a huge amount of electricity, and if you need to burn coal to make that electricity, which is what they do in Indonesia, they literally use a total, throughout the whole process, of about 25 to 30 tonnes of coal, per tonne of nickel,” said Selby.
“Carbon-wise, that works out to 90 tonnes of C02, per tonne of nickel. So all of a sudden, if you take your 50 kilos of nickel, and if that’s where it comes from, and you strap that onto a Tesla, you’re also bolting on close to four tonnes of CO2, which I’m not sure is what Elon had in mind.”
Selby said Musk explained that even though nickel pig iron will still be a source of growth and nickel supply in the short term, greener options are an obvious need.
There are proposals for further developments in Indonesia, but the dynamics are tricky and controversial in the southeast Asian nation.
“Building big tailings dams in highly seismic areas is a little bit challenging, so they’re looking at deep sea tailings. Well in today’s age, taking 100 tonnes of waste and dumping it into the ocean to produce one tonne of product, isn’t something that I think people who are buying electric vehicles are expecting.”
However, Timmins is located in a much more strategic location in terms of being able to meet the calls for environmentally sensitive nickel production.
Selby calls Canada Nickel Company’s Crawford Project, located approximately 40 kilometres north of the city, at a “great intersection” – particularly because of the region’s naturally occurring ultramafic rock.
“The rocks that make up serpentine, which is the rock that makes up the bulk of our deposit when it’s exposed to air, naturally absorbs CO2,” said Selby.
This means that tailings and waste rock piles would act almost as air purifiers.
Adding to the attractiveness of Timmins is that it’s an area with plenty of hydroelectric power.
“A large low-grade ore body, you end up using a lot of power in the mill, but all that power can be electricity. And because of the scale of our deposit, we can use big trolley trucks, and use electricity to replace a lot of the diesel used in the mining step. So the mining part can be relatively low carbon.”
In terms of processing the nickel, which has had a less-than- stellar reputation regarding emissions, Selby said they can utilize the naturally present serpentine to find a balance.
“In our case, we can just take the off-gasses from a local processing plant and pump them back out, and take advantage of the waste rock and tailings that will absorb that CO2.
“It’s not like we have to invent some new technology. This is just taking existing technologies that happen to all come together in the right location. We’re very confident that we’ll be able to deliver a very feasible zero-carbon nickel, zero-carbon cobalt, and a zero-carbon iron product,” said Selby, who has been in the nickel business for nearly 20 years, and good environmental stewardship has always been at the top of his priorities.
Another big reason for creating the subsidiary was to attract other investors for the processing facility, some of whom aren’t as keen to be involved with a mining operation.
“For us to have a separate subsidiary that is going to be focused solely on processing, it makes it much easier to bring joint venture partners in.”
Both Canada Nickel and NetZero will share employees for the time being, but as developments move forward, more positions would be created.
“We’re all set to go. We just need to push hard now on the project, and we’ll push hard on the engineering for the net-zero production.”
A scoping study will be done by year’s end, and the feasibility study is expected to be completed in late 2021.
“We will advance the engineering for the process options we want to go forward with over that time period,” said Selby.
“Then there will be a big commercial push to reach out to all of the electric vehicle people that I’ve been talking with. Their interest and need for nickel and cobalt isn’t going away, and if anything with all the incentives the governments are doing to get their economies going, green vehicles are a big beneficiary of that. So the need for more nickel, green nickel and cobalt is only getting bigger and bigger.”
Selby believes there is massive potential for the Timmins mining camp to become a leader in green mining and processing technology.
“The intersection of having these types of mineral deposits close to an urban centre with industrial capacity and low-cost hydroelectricity, there’s a potential not just for the products that we would make, but also for other companies to look at taking advantage of these ultramafic rock deposits in the area to look at other zero carbon processing. It’s early days, but I think it creates a whole other set of opportunities for Timmins.”