Nickel: global production to increase by 6.8% in 2021

Global nickel mine production is expected to grow by 6.8% to reach 2,427.4kt in 2021, after declining an estimated 4.2% to 2,272kt last year due to blockages and covid-related restrictions.

Indonesia (+16.3%), the Philippines (+5.1%) and Brazil (+24%) will contribute significantly to overall growth this year. In contrast, production is expected to decrease in Russia (-13.8%) and South Africa (-15.8%).

The combined production of Indonesia, the Philippines and Brazil is expected to increase from a collective 1,160kt in 2020 to 1,316.8kt in 2021 – an increase of 13.5%. The increase in production will be supported by the expansion of the nickel industry in Indonesia, the resumption of production at several mines in the Philippines and the upgrading of the Santa Rita mine in Brazil, which was previously shut down in 2015.

Overall, Indonesia and the Philippines will remain as the largest sources of nickel globally. Together with Russia, New Caledonia and Australia, these five countries account for almost three-quarters of the global total.

Looking ahead, nickel production over the forecast period is expected to grow at a compound annual growth rate (CAGR) of 3%, reaching 2,730.6kt in 2025.

Indonesia, Russia, Canada and the Philippines will be the main contributors to this growth. Combined production in these countries is expected to increase from a forecast 1,607kt in 2021 to 1,818.4kt in 2025.

Projects with the potential to commence operations during the forecast period include the Araguaia nickel project in Brazil, which is wholly owned by Horizonte Minerals, and is currently awaiting a final investment decision (FID). The $402.1m project will have an annual nickel production capacity of 14.5kt and is expected to commence operations in 2022.

During early 2021, the project’s infrastructure, including the award of construction licences for the transmission line and water pipeline, were approved by the company. Tenders for the supply of key equipment and services have been completed for approximately $230 million.

The Aquila nickel project in Indonesia, which is wholly owned by Solway Investment Group, has obtained regulatory approvals and permits. The $57m project will have an annual nickel production capacity of 16.6kt and is expected to commence operations in 2023.