Industry Trend Analysis - Nickel: Production Growth To Slow, Except In Indonesia - DEC 2016

BMI View: Global nickel production growth will slow to 2020 in all the largest producing countries except Indonesia. Nevertheless, a stabilisation of the environmental crackdown on nickel mines in the Philippines in 2017, as miners act to comply with regulations, will bring global production growth levels out of negative territory.

We forecast global nickel mine production to grow by an annual average of 2.3% over 2016-2020, significantly down from 9.1% average growth over the previous five years. Production in Indonesia will grow most strongly between 2016 and 2020, at an annual average of 10.6%, followed by Australia at 6.1%. In terms of absolute tonnage, the Philippines will still dominate, reaching a total of 471 thousand tonnes (kt) by 2020. However, the Philippines' growth rate will be the slowest among the top five producers of nickel ore, which will reduce the country's share of global supply from 19.4% in 2016 to 18.2% in 2020.

The mining of nickel deposits is far more insulated from the threat of falling ore grades than other minerals. Anecdotal evidence suggests that the production of nickel can be sustained at very low grades, such as purity levels of 0.1%. In contrast, such grades would make any copper, zinc or bauxite mine economically unviable.

Philippines To Dominate Quantity; Indonesia To Lead Growth
Global Nickel Mine Production (kt)
e/f = BMI estimate/forecast. Source: BMI, USGS

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