Blackstone Minerals has tabled a stunning pre-feasibility study for its vertically integrated nickel mine and refinery project in Vietnam that shows a post-tax net present value as high as $3.57 billion at today’s nickel prices. Almost inexplicably the company says the US$854 million CAPEX required to build the project could be paid down in just 1.8 years from first production. It will churn out over half a billion US dollars a year in operating cashflows across its initial mine life of just under ten years.
Instead of simply mining and producing nickel concentrate from its globally significant Ban Phuc deposit, Blackstone has boldly taken it a step further with a proposed refinery to create hotly demanded nickel-cobalt-manganese, or “NCM” precursor products.
Interestingly, Blackstone’s PFS economics are based on a conservative price of US$17,670 per tonne for the precursor product. If the study had used the current spot price of US$ 22,982 per tonne the post-tax net present value and internal rate of return would balloon significantly, increasing by nearly 80 and 50 per cent, respectively.
The PFS tables construction of the refinery in 2023 and first production of the precursor to begin in early 2025 with a payback term of 1.8 years in its conservative estimate and 1.3 years selling the product at its current spot price.
Its project is located 160 kilometres west of Vietnam’s capital city Hanoi and is situated amidst the country’s plethora of hydropower plants. With low-cost infrastructure and hundreds of hydropower plants, Vietnam is more than capable of facilitating Blackstone’s quest to produce “green” nickel. The company argues that by utilising the renewable energy sources available in Vietnam in its mining and processing it is able to accurately describe its nickel as “green”.
According to the International Nickel Study Group, the global demand for nickel will stand at about 3 million tonnes in 2022.
Typically, 80 per cent of nickel production is consumed in the steel industry however, EVs are causing a seismic shift in the nickel market.
Interestingly, Blackstone says the battery industry alone is forecasted to demand around 383,000 tonnes of nickel in 2022 to produce cathodes and that number could grow to a jaw-dropping 1.9 million tonnes per annum by 2030.
As more countries move to phase out the internal combustion engine it appears that the sale of EVs will be bottle-necked by the supply of battery metals.
Battery metals are causing an enormous stir globally. Kobold Metals is a new venture planning to accelerate the discovery of new battery metal deposits by creating a “Google Maps” of the Earth’s crust using artificial intelligence. The company was founded in November 2018 and is notably backed by such global business titans as Bill Gates and Jeff Bezos.
Blackstone Minerals is eyeing a position at the front of the grid for the electric vehicle revolution. Should its efforts to become a key supplier of “green” nickel pan out, it could well transform the West Perth-based explorer into a serious heavyweight in the battery metals sphere.
Is your ASX-listed company doing something interesting? Contact: matt.birney@businessnews.com.au
By Matt Birney
