Saudi Billions Flow into Battery Metals as Nickel Holds Steady

Nickel prices remain rangebound between $20,000-22,000 per tonne after briefly exceeding $22,000/t this month. Low LME inventories around 37,000-38,000 tonnes continue providing support. Sulphate nickel prices were flat as Chinese ore and NPI prices ticked higher, though stainless steel prices remain muted. Rumours suggest China’s State Reserve Bureau may be stockpiling nickel.

Saudi Arabia is investing $3.4 billion for a 10% stake in Vale's base metals business in Brazil, marking substantial Middle East capital entering the sector. As mining executive Mark Selby explained, "If people believe the energy transition is real, you've got tens if not hundreds of more capital employed in the oil and gas sector and even if a trickle of that capital starts to move over into mining because again if energy transition is real, if oil and gas has peaked and those people need to find a new growing business, then it's rational they would start deploying capital into the business that's replacing their current business."

Australia also added nickel to its critical minerals list, signalling domestic support. However, potential Russian nickel sanctions in Europe could challenge supply, as Russia provides close to 50% of Europe's nickel needs.

Junior miner Magna Metals’ PEA on the Crean Hill/Denison project in Canada, acquired from Sibanye, showed strong metrics but disappointed markets. The $129 million capital costs concerned investors hoping for an open pit restart before underground development. 

High-grade intervals were promising but life-of-mine grades of 0.6% nickel and 0.6% copper were lower than expected. The current $120 million valuation is a high P/NAV multiple for the sector. It exemplifies the challenges of narrow, discontinuous high-grade zones.

Meanwhile, junior explorers like Widgie Nickel announced encouraging drilling results in Australia. Neighbour Timmins saw resources at one deposit double the 2010 estimates. This points to discoveries still being made.

Mark Selby, CEO of Canada Nickel, explained the importance: "Even if a fraction of oil and gas capital comes across that'll really feel like a tidal wave coming into the market and it also that'll be a signal to the generalists, who have been sitting on the sidelines in mining, that this is now a sector we need to rotate into." However, the generalists will likely wait for more data points before fully diving in.

Overall, for nickel and EV investors, these developments affirm bullish demand trends but highlight supply challenges. While fundamentals are strong, bringing new sources online remains difficult. Investors must watch inventory draws but be realistic on new supply meeting demand growth in the near term.

‍About Canada Nickel‍

Canada Nickel is emerging as a major player in the nickel mining sector through its 100% owned Crawford Nickel Sulphide project in Timmins, Ontario. Crawford is the largest nickel discovery since the 1970s and is located in an established mining jurisdiction with good infrastructure. Through over 20 transactions, Canada Nickel has also consolidated a vast regional land package 50 times larger than Crawford with 20 additional targets, demonstrating the potential for further substantial discoveries and resource growth. With its significant existing resource, low carbon production potential and exploration upside across its district-scale land holdings, Canada Nickel is well positioned to become a leading nickel producer.