Balmoral Resources Ltd BALMF

Nickel Is A Psuedo Energy Play

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I spent a great deal of time researching the economics of marginal nickel deposits a few years ago.  I did this because of a large investment I have in FPX, but I won't go into all the reasons for that here.

What became clear to me is that Chinese nickel pig iron, sourced from laterite deposits in Indonesia and the Phiippines and smelted in China, is the nickel industry swing producer.

Nickel pig iron is very energy intensive to process as well as being an environmemntal disaster. This is because he entire volume of mined ore needs to be raised to smelting temperatures, as no pre-smelting concentration is possible.

So it comes as no surprise that nickel pig iron production became more economic with the recent fall oil price.  And no further surprise that the price of nickel fell at the same point in time.  I will leave aside the absoute absurdity of "environmentalist" over the use of fossil fuels that are consumed in the production of nickel, some of which is used for the "green" batteries that they so dearly love.  Generally speaking, "environmentalists" are ignorant lemmings.

The prediction that flows from all this is that nickel prices will increase with the price of energy and that any increase in the price of energy will hit the swing production laterite sourced Chinese nickel pig iron the hardest.  That is why I like FPX.  Nickel production from their Decar deposit is low grade and easily upgraded by well establised hydrometallurgical processes.  So it is pretty much immune to increases in energy costs.  It is also as "green" as they come.