Alliance Nickel shares rise on plans to build $1.7 billion Goldfields nickel mine in battery metal revival bet

Listed junior Alliance Nickel has laid blueprints for a new mine in the Goldfields that would cost $1.65 billion to build over the next three years in a long bet on the battery commodity’s return to life. Alliance on Thursday released its definitive feasibility study for the NiWest project, which is located about 35 kilometres away from Glencore’s Murrin Murrin in the Goldfields — the only nickel operation still standing in WA amid the latest downturn. NiWest would be producing 19,500 tonnes of nickel annually for 12 years based off the latest studies. That was booked on the assumption nickel prices will get up and stay above $US22,325 per tonne ($34,299). Prices for the battery metal on the London Metals Exchange reached just shy of $US18,000 per tonne in early October, and have since fallen to about $US15,600. Low prices in the past 12 months have brought the demise of nearly all nickel mines in the State, including BHP Nickel West. NiWest would also produce about 1,600 tonnes of cobalt. The Paul Kopejtka-led company needs to stack up financial backers for the expensive development. It will sell up to 50 per cent of the project to a partner to raise capital, and seek commercial and government debt. NiWest was granted major project status by the Federal Government at the start of this year. Automaker Stellantis agreed in 2023 it would buy 40 per cent of the battery-grade nickel Alliance produces in its first five years. Alliance has also recently said it is in talks with Samsung to try and pin down another offtake deal. The new budget for the project is up about 31 per cent on what had been estimated in a pre-feasibility study in 2022 because of increased costs associated with securing water for the operation, Alliance said. Mr Kopejtka said NiWest would be a “truly significant project for WA” and create 600 jobs during construction and 300 during operations. “Whilst the nickel market has experienced some volatility over the past year primarily due to oversupply from Indonesia, we firmly believe the long-term outlook for nickel remains positive,” he said. “Nickel demand is expected to grow substantially over the next decade supported by the global adoption of electrical vehicles and broader electrification, and Alliance is well placed to benefit from this ongoing transformation.” WA Mines Minister David Michael said he looked forward to seeing the project progressing. “Nickel is recognised as a critical mineral in Australia and is a key commodity in products essential for global decarbonisation efforts.” The junior is targeting a final investment decision on the project in the second half of next year, and subject to finance and approvals, to reach first production in 2027 after a two-year build. Alliance’s share price spiked 16.2 per cent after releasing the study to 4.3¢, before closing at 4.2¢.