Alliance Nickel is pushing forward with its NiWest Nickel Cobalt Project in Western Australia, confident that its high-quality, low-carbon, and low-cost approach will allow it to thrive despite the current downturn in the nickel market.
The company recently published its definitive feasibility study (DFS) in November 2024, marking a significant milestone for the project.
Last year, nickel prices plummeted due to a surge in supply from Indonesia, making it the worst-performing metal on the London Stock Exchange.
However, Alliance Nickel believes NiWest can overcome these challenges due to its unique characteristics and strategic advantages.
The DFS, representing $20 million (US$12.4 million) in shareholder investment over two years, projects an average annual production of 20,000 tonnes of nickel and approximately 1,600 tonnes of cobalt over the first 12 years.
Over the project’s 27-year lifespan, an estimated 252.8 million tonnes of dry material will be mined across seven areas within a 50-kilometre radius of the proposed processing plant at Mt Kilkenny.
“This is a bankable DFS,” asserted Alliance Nickel’s Managing Director and CEO, Paul Kopejtka.
“Even in these challenging times… Yes, we would like the price to be higher, but the question is, if we were producing under this cost environment [US$15,500/t at the time of speaking], would we make money? And the answer based on the DFS is yes.”
The company has engaged with approximately 13 commercial banks and has received a “hugely positive response” to the project.
Alliance Nickel is also in discussions with Export Finance Australia, the Canadian export credit agency (ECA), Samsung, and South Korean ECAs.
Negotiations with existing and potential strategic partners, including carmaker Stellantis, are actively underway, focusing on securing offtake aligned to project-level joint venture investment.
NiWest is a nickel laterite project that employs a low-cost processing method, integrating heap leaching with direct solvent extraction (DSX) and crystallisation to produce high-purity nickel and cobalt sulphates with a low carbon footprint.
This process has been utilised by Glencore at the nearby Murrin Murrin mine and others globally.
Heap leaching involves stacking nickel laterite ore and applying a leaching solution to dissolve the nickel and cobalt content.
The pregnant leach solution then undergoes DSX, selectively separating nickel and cobalt from impurities.
The final stage involves crystallising the purified solutions to produce battery-grade nickel and cobalt sulphate crystals.
According to Kopejtka, the heap leaching process is less capital-intensive than other methods like high-pressure acid leaching (HPAL).
The reproduction capex for NiWest is around US$1.65 billion, approximately half the cost of HPAL projects.
This low-cost process positions the NiWest project in the first cost quartile, even below projects in Indonesia, with an all-in sustaining cost of US$4.84/lb of nickel.
The NiWest project boasts low-carbon credentials due to its energy generation method. The processing plant will generate power by burning sulphur to produce acid, which in turn generates steam to power the mine and refinery.
“There is no cost to that power for us, as opposed to other projects, which may have to import power from the grid, which in Indonesian nickel, for example, is generally from coal-fired power stations,” Kopejtka explained.
The mining operation will be open-pit with a low strip ratio, utilising a conventional load and haul mining fleet and limited blasting.
The NiWest project has faced challenges due to water scarcity in the region, adding $350 million to its cost.
“The water that was meant to be where our mine is turned out to be much less than anticipated,” Kopejtka said.
“So we had to go further away [around 200 kilometres] until we could find sufficient quantities.”
The company has allocated approximately $300 million for water infrastructure.
Alliance Nickel anticipates securing a 10 per cent premium over the London Metal Exchange nickel price for its nickel sulphate, reflecting its high purity and suitability for battery manufacturing, as well as its low-carbon footprint.
Kopejtka is confident that Western OEMs and battery manufacturers will pay a premium for low-carbon, Inflation Reduction Act (IRA)-compliant nickel.
Traceability is crucial to prove IRA compliance, excluding minerals produced by companies with more than 25 per cent ownership from a foreign entity of concern, such as China. Environmental, social, and governance audits will be necessary to verify carbon footprint and origin.
The financial investment decision for the NiWest project is expected around August 2025.
If approved, the project could create approximately 600 jobs in Western Australia during construction and 300 jobs during its operational life, providing a significant boost to the region’s economy.
