Introduction to Nickel

By Vivien Diniz – Exclusive to Nickel Investing News

Nickel is a lustrous silvery-white, corrosion-resistant metal with a reddish tinge that has been used for thousands of years. Along with three other metals, cobalt, iron and gadolinium, nickel is an elements that is ferromagnetic when at or near room temperature. The unique properties of nickel lend to the attraction of the metal’s extreme importance in industrial applications. A commonly overlooked presence of modern day life, nickel is used in applications in buildings and infrastructure, household equipment, chemical production, and energy supply, to name a few.

Usage

Due to the corrosion-resistant properties of nickel, the metal is mostly used in the production of nonferrous alloys and superalloys. Over half of the global nickel produced goes into making stainless steel. Stainless steel offers consumers a cost-efficient, corrosion-resistant, stable, ductile, austenitic material that is easy to clean and relatively easy to fabricate. The inherent properties of stainless steels have proven to be an ideal product for use in hygienic applications such as food preparation or medical equipment.

Of the other applications of the silvery metal, nickel is used in production of coins, green coloring for glass and in rechargeable batteries. Currently there are several types of nickel batteries on the market; nickel-cadmium and nickel-metal-hydride are the most common.

Demand

In direct correlation with economic growth, the demand and usage of nickel has its share of ups and downs. For the most part, the demand for nickel is derived primarily from the demand for stainless steel. Because much of the Western world’s infrastructure was built prior to stainless steel becoming popular, Asia accounts for a large percentage of the current demand. In recent years, Asia has accounted for more than 50 percent of the world demand for nickel, with 25 percent of that demand coming from China alone. With China’s recently increased efforts in urbanization, in 2010 Asia, as a whole, produce 14,731 million metric tonnes of stainless and heat resistant steel, of which China accounted for more than half.

Producing countries

While Nickel is mined in approximately 20 different countries, three dominate the top three spots in terms of nickel deposits: Russia, Canada, and Australia.

Russia ranks first as the world’s largest nickel producing country. In Russia, two economic concentrations of nickel can be found in two different geological environments: sulphide ore and lateritic nickel ore.

Russian mining giant Norilsk Nickel (LON:MNOD) is the world’s largest producer of nickel. The Company is involved in not only the exploration and extraction of nickel, but also the refining, metallurgical processing and production of the base metal. Norilsk has facilities in six countries: Russia, Australia, Botswana, Finland and South Africa.

The second largest nickel producing country is Canada. While most Canadian provinces are exploring for nickel in Canada, most of the nickel currently in production comes from the Thompson Nickel Belt in Manitoba, the Sudbury Basin of Ontario, and the Ungava peninsula of Quebec.

The Brazilian company, Vale (NYSE:VALE) owns several properties in Canada’s prolific nickel basins. The company owns the Long Harbour project in the Voisey Bay Complex in Labrador, the Totten mine in Sudbury, Ontario, and the Thompson mines in Manitoba. Vale Nickel has several other nickel projects in the US, Indonesia, Asia, New Caledonia, the UK and Brazil.

With a substantial nickel resource, Australia is the world’s third most significant producer of nickel. The country primarily exports its nickel products to Europe, Japan and the United States, providing the country with an important source of export income.

In Australia, BHP Billiton (NYSE:BHP) is the world’s third largest producer of nickel. BHP Billiton Stainless Steel produces nickel in a variety of formats, from high nickel briquettes, powders and ferronickel granules to intermediate forms of nickel such as mattes and concentrates. BHP has two nickel operation in Western Australia and Columbia.