The Rise Of Nickel
Most of us gold and metal buffs tend to follow the precious metal scene and aside from taking a glance a copper once in a while we seem to ignore what's going on with the base metals. For the past year a lot of analysts have been following cobalt and lithium but at the same time nickel has almost doubled and very few had even noticed. If you have a junior mining stock that has exposure to nickel you may have seen a bit of a bounce or slight increase but all in all the gains in nickel have not reflected it's self in the stocks. Some of the stocks that have seen price gain of course is Alcoa and Excelsior Mining.
Two stocks that have a nickel exposure that I follow are Royal Nickel TSX:V-RNX and of course good old Sherritt TSX-S. Royal Nickels principal assets are the producing Beta Hunt gold and nickel mine in Western Australia, a 50% stake in the nickel joint venture that holds the Dumont Nickel Project in the Abitibi region of Quebec, anda 30% stake in the producing Reed Mine in the Flin Flon-Snow Lake region of Manitoba, Canada.
Another explorer that is focused on nickel is North American Nickel TSX-V: NAN. North American Nickels main project is the Maniitsoq property in Greenland and the Post Creek and Halcyon projects in Ontario.
So why is nickel taking of in price while precious metals are sitting dormant? One of the larger reasons is of course USA and Russia embargoes and sanctions. Norlisk which is the Russia's largest nickel miner is also one of the worlds largest nickel producers and when sanctions went into effect that of course has an effect on availability of the product.
Also last year Indonesia put an export ban on nickel that was produced in the country and added to extra pressure on the supply side. Indonesia wanted to see more nickel being refined and smelted in it's own country instead of being shipped out to other countries.
Last but not least, the new electric cars not only use lithium and cobalt but there is also a lot of nickel that is used in these automobiles. Nickel sulfide deposits are used to make nickel metal as well as nickel sulfate. The latter salt, nickel sulfate, is what's used primarily for electroplating and lithium-ion cathode material, and less than 10% of nickel supply is in sulfate form. As more and more cars become electric there will be more of a demand for nickel especially the nickel sulfate and less than 10% of this nickel is in sulfate form and even less is suitable for batteries.
The way the gold and silver market is going, maybe it's time to look at nickel as a wealth creator.
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