Both copper and nickel have taken the centre stage in the so-called “green revolution”, as they are vital metals needed for EVs, battery storage, charging stations and related grid infrastructure.
The trend is powered by governments commitment to reduce carbon emissions enough to keep global temperatures from increasing by less than 2°C a year by 2050.
That means more clean electricity, a shift that’s likely to be copper-intensive given the $28.7 trillion grid build out required, according to Citigroup Global Markets.
“Nickel is fast becoming the ‘work horse’ of battery technology, playing an essential role in the world’s efforts to decarbonize,” Tyler said in a speech to the PDAC mining conference in Toronto. She forecast a “golden age” for exploration in the years ahead, where innovation and new technology would help to unlock resources of the future.
Nickel production would need to increase nearly fourfold to meet expected demand for electric and hybrid vehicles, Tyler said. Likewise, copper output would also need to grow exponentially to meet demand from renewable power generation, battery storage, electric vehicles, charging stations and related grid infrastructure.
Tesla’s (NASDAQ: TSLA) boss Elon Musk has expressed worries about a looming nickel shortage. He pleaded with miners last year to produce more nickel, promising a “giant contract” for supply produced efficiently and in an “environmentally sensitive way”.
Last week, the EVs maker became involved in the development of the conflict-ridden New Caledonia nickel mine, as part of the company’s attempt to secure enough supply of the key battery metal
BHP’s chief executive, Mike Henry, has repeatedly said that the company needs more “future-facing” metals, such as copper and nickel.
The company has spent the past four years moving in that direction. Already the world’s second-biggest listed copper miner, BHP has boosted exploration spending to find new copper deposits.
In 2019, the mining giant became the top shareholder in SolGold (LON:SOLG) (TSX:SOLG), which is developing the Cascabel copper-gold project in Ecuador. The asset has the potential to become one of the largest copper-gold assets ever discovered, with an estimated productive mine-life of 55 years.
In November, BHP announced it was ramping up work at the ongoing $2.5 billion expansion of its Spence copper mine in Chile, with first production expected in the first half of 2021.
Closer to key markets
BHP said that moving the 50-people exploration team to Toronto from Santiago, Chile, will allow the company to be closer to its main markets. It is also expected to open up more opportunities in funding and recruitment.
“To own the best assets in the best commodities, you have to look for them and develop them well ahead of time,” Tyler said. “To do so, we need to imagine what the world could look like in 50 or even 100 years from now.”
BHP’s decision comes as Canadian authorities talk up the country as the new hub for clean-tech metals.
Minister of Innovation, Science and Industry, Francois-Philippe Champagne, said on Wednesday that Canada was uniquely positioned to become a “global leader in electric vehicle manufacturing.”
“Canada offers renewably generated electricity, a skilled workforce, a stable and predictable jurisdiction to operate in, the rule of law – a commodity very much in demand these days – and an abundance of the critical minerals needed for the batteries that power electric vehicles,” he said.
Champagne also highlighted the nation’s advantages in terms of investment opportunities. “Canada has a new free trade agreement [North American Free Trade Agreement] with the U.S. and Mexico, which means that companies who open up operations here have access to supply chains and customers across North America.”
