The nickel market in Canada is expanding so fast that suppliers can barely keep up with demand for that critical mineral.
And with Vale as the key supplier of nickel for the North American automotive battery market, the company's head of Ontario base metal operations, said this presents huge economic opportunities for Vale and its host communities.
Gord Gilpin was the keynote speaker Thursday for the Greater Sudbury Chamber of Commerce president's speaker series.
Before an audience of mining supply executives and other business leaders, Gilpin didn't hide his enthusiasm for the future of Vale's North Atlantic operations, which includes Manitoba, Newfoundland, Labrador, Ontario, the United Kingdom and Japan.
Gilpin said the battery electric vehicle market is changing the nickel industry.
"There's no doubt about it. And it's quite exciting. I know you've probably talked a lot about electric vehicles. You've heard a lot about it. It is something we've been talking about for many years. And when you take a look at nickel demand, the forecast is out about 10 years. We see the total demand basically doubling ... and a significant component of that is going to be due to electric vehicles," Gilpin said.
He said nickel production for stainless steel will continue as will the creation of specialty alloys, but the company is now pivoting to dedicate 30 to 35 per cent of all nickel production dedicated to electric vehicles (EV).
Gilpin said the other important point is that Sudbury nickel is low-carbon nickel, meaning it is classed as an environmentally clean mineral.
"You know, the easiest way to think of it or understand why, is that a nickel-rich EV battery requires between 40 to 60 kilograms of nickel," Gilpin said.
"The other thing that matters though is you've got to remember why the world is going in this direction. It's about the environment. And if the nickel isn't produced in an environmentally responsible way, what happens is you're not gaining anything. Consumers are smart. And basically, the comment is if the nickel is not clean, what's the point?"
Gilpin added that Vale is fortunate to have a unique nickel product that meets that demand
“We're blessed in our jurisdiction here to have some of the cleanest nickel in the world from an GHG (greenhouse gas) footprint perspective. So from a point in time perspective, it's a very special time to be where we are, we are the only mine to refine supplier nickel for the North American market. We are fortunate to have assets in some of the best jurisdictions from a mining perspective in the world, with a very, very competitive ESG footprint.”
Gilpin also made the point that Vale is not taking anything for granted or just assuming that there is still plenty of nickel yet to be mined. He said the company is active in terms of exploration to find new ore zones.
"I think one of the things that often people think of is that because we've been around for so long in the area, and what's left? But the point is that Sudbury still has high potential for the discovery of some good size deposits, both above 1,000 metres, and also above 3,000 metres," said Gilpin.
"Over the next five years, we're going to be investing $125 million per year in Canada, on exploration; basic drilling programs. And in Sudbury, that component for 2023 is actually $67 million. That's a pretty big investment from an exploration perspective," Gilpin told the audience.
“And I think it's just a recognition that, you know, over the years, maybe we haven't hit the mark on that. But the company is very serious about what I described on the exploration slide there. And it's quite exciting. Like right now we have 28 drills turning in Sudbury alone. 13 on the surface, 15 underground.”