Billionaire Andrew Forrest is making an unwavering commitment to become a dominant player in the nickel supply market, as his private company Wyloo Metals finalises its $760 million acquisition of Mincor Resources (ASX:MCR).
With a vision of a significant demand surge for nickel similar to the one witnessed by the lithium market, Forrest and Wyloo are positioning themselves as key suppliers to car manufacturers and original equipment manufacturers (OEMs) seeking to secure mineral supply for electric vehicle batteries.
Wyloo and Forrest firmly believe that a significant divide is emerging between nickel sulphide deposits, favoured by battery manufacturers for their environmental benefits, and nickel laterite operations supported by China in Indonesia. Driven by concerns over the uneven environmental impact, Forrest is determined to avoid nickel laterite operations in tropical regions like Indonesia, where tailings disposal ends up in the ocean.
"We're not satisfied that the environmental and ecological analysis has been done to justify deep sea tailing disposal at all," stated Forrest, highlighting the sustainability concerns associated with nickel laterite operations.
Wyloo is strategically targeting nickel sulphides, which are considered the most environmentally friendly and cost-effective option for battery manufacturing. Nickel sulphides offer superior economics, can be processed into battery-grade nickel with minimal environmental impact, and are fully recyclable. Forrest intends to give the market a choice between "clean nickel" and "dirty nickel" to create awareness and encourage the adoption of sustainable practices in the industry.
The recent acquisition of Mincor Resources provides Wyloo with control over mines near Kambalda in Western Australia, a nickel-rich region that has produced 1.6 million tonnes of the metal over the past five decades. Wyloo CEO Luca Giacovazzi believes that there is still a significant amount of untapped nickel sulphide resources in the area, with the potential for new discoveries.
While visiting Mincor's operations, including the new Cassini mine and older Long operations, Forrest expressed his eagerness to re-enter the nickel market. He views nickel as the most recyclable and undervalued mineral among the battery minerals.
Looking ahead, Wyloo and its partner, critical minerals producer IGO, are considering the construction of a processing plant in Kwinana, south of Perth. The plant would produce a precursor material for battery cathodes by combining nickel, cobalt, and manganese. A final investment decision on the plant is expected to be made before the end of 2024.
With its strategic acquisitions and focus on sustainable nickel production, Wyloo Metals aims to play a significant role in the battery minerals market. As the company positions itself as a major nickel supplier to car and battery manufacturers, the industry's shift towards clean and responsibly sourced materials may lead to increased market demand for Wyloo's products.
