Nickel: The Secret Driver of the Battery Revolution
Commodity markets are being turned upside down by the EV revolution.
But while lithium and cobalt deservedly get a lot of the press, there is another metal that will also be changed forever by increasing penetration rates of EVs in the automobile market: nickel.
Today’s infographic comes to us from North American Nickel and it dives into nickel’s rapidly increasing role in lithium-ion battery chemistries, as well as interesting developments on the supply end of the spectrum.
Nickel’s Vital Role
Nickel’s role in lithium-ion batteries may still be underappreciated for now, but certainly one person familiar with the situation has been vocal about the metal’s importance.
Our cells should be called Nickel-Graphite, because primarily the cathode is nickel and the anode side is graphite with silicon oxide.
– Elon Musk, Tesla CEO and co-founder
Indeed, nickel is the most important metal by mass in the lithium-ion battery cathodes used by EV manufacturers – it makes up about 80% of an NCA cathode, and about one-third of NMC or LMO-NMC cathodes. More importantly, as battery formulations evolve, it’s expected that we’ll use more nickel, not less.
According to UBS, in their recent report on tearing down a Chevy Bolt, here is how NMC cathodes are expected to evolve:
The end result? In time, nickel will make up 80% of the mass in both NCA and NMC cathodes, used by companies like Tesla and Chevrolet.
Impact on the Nickel Market
Nickel, which is primarily used for the production of stainless steel, is already one of the world’s most important metal markets at over $20 billion in size. For this reason, how much the nickel market is affected by battery demand depends largely on EV penetration.
EVs currently constitute about 1% of auto demand – this translates to 70,000 tonnes of nickel demand, about 3% of the total market. However, as EV penetration goes up, nickel demand increases rapidly as well.
A shift of just 10% of the global car fleet to EVs would create demand for 400,000 tonnes of nickel, in a 2 million tonne market. Glencore sees nickel shortage as EV demand burgeons.
– Ivan Glasenberg, Glencore CEO
The Supply Kicker
Even though much more nickel will be needed for lithium-ion batteries, there is an interesting wrinkle in that equation: most nickel in the global supply chain is not actually suited for battery production.
Today’s nickel supply comes from two very different types of deposits:
- Nickel Laterites: Low grade, bulk-tonnage deposits that make up 62.4% of current production.
- Nickel Sulfides: Higher grade, but rarer deposits that make up 37.5% of current production.
Many laterite deposits are used to produce nickel pig iron and ferronickel, which are cheap inputs to make Chinese stainless steel. Meanwhile, 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.
Not surprisingly, major mining companies see this as an opportunity. In August 2017, mining giant BHP Billiton announced it would invest $43.2 million to build the world’s biggest nickel sulfate plant in Australia.
But even investments like this may not be enough to capture rising demand for nickel sulfate.
Although the capacity to produce nickel sulfate is expanding rapidly, we cannot yet identify enough nickel sulfate capacity to feed the projected battery forecasts.
– Wood Mackenzie
Visualizing China’s Dominance in Clean Energy Metals
Despite being the world’s biggest carbon emitter, China is also a key producer of most of the critical minerals for the green revolution.
Visualizing China’s Dominance in Clean Energy Metals
Renewable sources of energy are expected to replace fossil fuels over the coming decades, and this large-scale transition will have a downstream effect on the demand of raw materials. More green energy means more wind turbines, solar panels, and batteries needed, and more clean energy metals necessary to build these technologies.
This visualization, based on data from the International Energy Agency (IEA), illustrates where the extraction and processing of key metals for the green revolution take place.
It shows that despite being the world’s biggest carbon polluter, China is also the largest producer of most of the world’s critical minerals for the green revolution.
Where Clean Energy Metals are Produced
China produces 60% of all rare earth elements used as components in high technology devices, including smartphones and computers.
The country also has a 13% share of the lithium production market, which is still dominated by Australia (52%) and Chile (22%). The highly reactive element is key to producing rechargeable batteries for mobile phones, laptops, and electric vehicles.
But even more than extraction, China is the dominant economy when it comes to processing operations. The country’s share of refining is around 35% for nickel, 58% for lithium, 65% for cobalt, and 87% for rare earth elements.
Despite being the largest economy in the world, the U.S. does not appear among the largest producers of any of the metals listed. To shorten the gap, the Biden administration recently launched an executive order to review the American strategy for critical and strategic materials.
It’s also worth noting that Russia also does not appear among the top producers when it comes to clean energy metals, despite being one of the world’s leading producers of minerals like copper, iron, and palladium.
Low Regulation in the Clean Metal Supply Chain
While China leads all countries in terms of cobalt processing, the metal itself is primarily extracted in the Democratic Republic of Congo (DRC). Still, Chinese interests own 15 of the 17 industrial cobalt operations in the DRC, according to a data analysis by The New York Times and Benchmark Mineral Intelligence.
Unfortunately, the DRC’s cobalt production has been criticized due to reports of corruption and lack of regulation.
Part of the Congolese cobalt comes from artisanal mines with low regulation. Of the 255,000 Congolese artisanal miners, an estimated 40,000 are children, some as young as six years old.
The Rise of Clean Energy Metals
The necessary shift from fossil fuels to renewable energy opens up interesting questions about how geopolitics, and these supply chains, will be affected.
In the race to secure raw materials needed for the green revolution, new world powers could emerge as demand for clean energy metals grows.
For now, China has the lead.
Ranked: Nuclear Power Production, by Country
Nuclear power accounted for 10% of global electricity generated in 2020. Here’s a look at the largest nuclear power producers.
Nuclear Power Production by Country
Nearly 450 reactors around the world supply various nations with nuclear power, combining for about 10% of the world’s electricity, or about 4% of the global energy mix.
But while some countries are turning to nuclear as a clean energy source, nuclear energy generation overall has seen a slowdown since its peak in the 1990s.
The above infographic breaks down nuclear electricity generation by country in 2020 using data from the Power Reactor Information System (PRIS).
Ranked: The Top 15 Countries for Nuclear Power
Just 15 countries account for more than 91% of global nuclear power production. Here’s how much energy these countries produced in 2020:
|Rank||Country||Number of Operating Reactors||Nuclear Electricity Supplied|
|#5||South Korea 🇰🇷||24||152,583||6.0%|
|Rest of the World 🌎||44||207,340||8.1%|
In the U.S., nuclear power produces over 50% of the country’s clean electricity. Additionally, 88 of the country’s 96 operating reactors in 2020 received approvals for a 20-year life extension.
China, the world’s second-largest nuclear power producer, is investing further in nuclear energy in a bid to achieve its climate goals. The plan, which includes building 150 new reactors by 2035, could cost as much as $440 billion.
On the other hand, European opinions on nuclear energy are mixed. Germany is the eighth-largest on the list but plans to shutter its last operating reactor in 2022 as part of its nuclear phase-out. France, meanwhile, plans to expand its nuclear capacity.
Which Countries Rely Most on Nuclear Energy?
Although total electricity generation is useful for a high-level global comparison, it’s important to remember that there are some smaller countries not featured above where nuclear is still an important part of the electricity mix.
Here’s a breakdown based on the share of nuclear energy in a country’s electricity mix:
|Rank||Country||Nuclear Share of Electricity Mix|
|#13||South Korea 🇰🇷||29.6%|
|#17||United States 🇺🇸||19.7%|
|#19||United Kingdom 🇬🇧||14.5%|
European countries dominate the leaderboard with 14 of the top 15 spots, including France, where nuclear power is the country’s largest source of electricity.
It’s interesting to note that only a few of these countries are top producers of nuclear in absolute terms. For example, in Slovakia, nuclear makes up 53.6% of the electricity mix—however, the country’s four reactors make up less than 1% of total global operating capacity.
On the flipside, the U.S. ranks 17th by share of nuclear power in its mix, despite producing 31% of global nuclear electricity in 2020. This discrepancy is largely due to size and population. European countries are much smaller and produce less electricity overall than larger countries like the U.S. and China.
The Future of Nuclear Power
The nuclear power landscape is constantly changing.
There were over 50 additional nuclear reactors under construction in 2020, and hundreds more are planned primarily in Asia.
As countries turn away from fossil fuels and embrace carbon-free energy sources, nuclear energy might see a resurgence in the global energy mix despite the phase-outs planned in several countries around the globe.
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