01 August 2023
At Nickel West - together with our people, our suppliers, our business partners and our communities - we’re focused on helping to deliver essential resources for a decarbonising world.
For those unfamiliar with our Nickel asset, here’s a little background.
Nickel West is the largest nickel producer by volume in WA and one of the world’s leading suppliers of nickel to the battery market.
We have the second biggest nickel sulphide endowment globally (based on ownership interest), with more than 7.4Mt of nickel in the Agnew-Wiluna Belt in the northern Goldfields, which remains largely unexplored.
We have around 3500 employees across the Goldfields and our Kwinana operations, and our business is fully integrated from mine-to-market.
At Mt Keith we have a large open cut mine and large nickel concentrator, and to its south we have an underground mine at Cliffs.
At Leinster, we have an underground mine and concentrator and drier and the Kambalda concentrator mills ore and dries concentrate purchased from third parties in the Kambalda region.
Our nickel smelter in Kalgoorlie has been operating for more than 50 years.
Three streams of concentrate come together for processing at Kalgoorlie, which has one of the largest flash furnaces in the world, producing nickel matte at 66% purity. Some of this matte is exported for sale.
The majority of the matte is railed to our Kwinana Nickel Refinery, where we opened Australia’s first nickel sulphate plant just under two years ago.
It was the first of its kind in Australia and has the capacity to produce enough premium nickel sulphate to make 700,000 EV batteries each year.
We produce a range of products at Kwinana – nickel sulphate, nickel metal, and various by-products, some of which are sold on the Kwinana strip.
By FY2022, around 85% of our product was going into the battery storage or electric vehicle sector, with customers and MOUs ranging from Ford, Tesla, Toyota.
We have a very vertically-integrated infrastructure and it supports the high-grade nickel production and there's lots of opportunities to grow through the value chain.
Over recent years, our business has had a massive transformation as we looked to diversify and seek out alternative uses for our nickel. At a time when we have seen the acceleration of the new energy future and a much greater focus on sustainability outcomes and ambition.
We’ve grown from a commodity supplier in the stainless-steel sector, to become one of the world’s leading suppliers to the battery metals market.
We made the transition into the battery sector through 2017 to 2019, when about 5 to 10% of our products went to the battery market, and just 4 to 5 years later, by FY2022, we were at 85%.
It really shows the acceleration of the global demand picture.
We have a competitive advantage and are positioning our business for growth.
Access to high quality nickel is a key to global decarbonisation and the electrification megatrend…
So, let’s talk about the ‘global picture’ and how Nickel West fits in.
Worldwide, we expect 3 out of 5 passenger car sales to be electric by 2030, rising to 9 out of
10 by 2040.
In a plausible upside case, we estimate there could be well over 400 million electric vehicles on the world’s roads in 2030 – up from about 16 million today.
Building those vehicles could require up to 26 million tonnes of copper and 15 million tonnes of nickel to supply that new demand.
And that doesn’t include the materials that will be required to charge them, or produce the zero-carbon electricity that will power them.
The dominant battery chemistry powering this global fleet is expected to rely on nickel.
We are also seeing increasing policy support and incentives for the energy transition, as well as policies to ensure the materials used in a sustainable economy are themselves produced sustainably.
Whether it is the US Inflation Reduction Act, the EU Battery Regulation, the EU Critical Raw Materials Act, or our own critical minerals strategy and discussions.
Things are moving rapidly as the supply, demand picture adjusts.
The good news is that in most cases Australia and our sustainability credentials are well placed to leverage this.
As a mining cohort, we must continue to work together to make Australia a partner of choice, and to demonstrate as an industry we are sustainable, responsible and competitive.
At Nickel West, we are not only providing critical resources for a decarbonising world … but to thrive in a low carbon economy WE too must decarbonise.
It’s not just the right thing to do, it’s a requirement and expectation of our customers.
We have one of the lowest production carbon emissions intensity of benchmarked nickel producers globally, but we still have big plans to reduce our operational greenhouse gas emissions and seek to deliver even greater value to our customers.
At Nickel West, our emissions profile across our portfolio is quite different to a lot of other miners in that the majority are from electricity, rather than diesel.
Approximately half of our carbon emissions are from electricity consumption, so reducing Scope 2 emissions has been a high priority for our business.
And… you’ll see here why partnering for success is so important.
We have been very active in securing renewable energy to power our operations and have already executed large scale renewable energy power purchase agreements.
This includes 50MW of power from the Merredin Solar Farm – the largest solar farm in WA.
And 75MW from the Flat Rocks Wind Farm near Kojonup.
When fully operational, these two agreements are expected to provide Nickel West’s downstream Southern Operations with a reliable supply of renewable energy over a 24-hour period, covering 100% of the power requirements of the Kalgoorlie smelter, the Kwinana refinery and the Kambalda concentrator by 2024.
The Merredin Solar Farm has already meant significant energy cost savings to Nickel West and, from 2024, is expected to reduce emissions from electricity use at our Kwinana refinery by up to half… based on FY2020 levels.
Renewable energy for our business
Construction of the Flat Rocks Wind Farm started in July last year, and installation of the 18 massive turbines is now in full swing, with the project expected to be operational early in the new year.
We have an initial 12-year power purchase agreement with Enel Green Power for 100% of the energy produced at Flat Rocks, which is expected to help reduce
Nickel West’s Scope 2 carbon emissions by around 32%, and overall emissions by 16.5%... from our FY2020 total.
Most importantly, it is expected to generate renewable energy equivalent to the entire current annual electricity consumption at our Kalgoorlie Nickel Smelter AND our Kambalda Concentrator each year.
We have also partnered with Transalta to build two solar farms at our sites in the Northern Goldfields.
I’m very excited about this as it is BHP’s first on-site, large scale renewable project and we are getting very close to switching it on.
It is a vast array of about 70,000 solar panels across 90 hectares and will reduce our Northern Energy System Scope 2 emissions by 12%, which in turn will reduce Nickel West’s total Scope 2 emissions by 5%.
It includes 38.1MW of solar energy…
And a 10.1MW battery energy storage system, which I’m pleased to say we energised for the first time this week.
Commissioning is underway as we speak, and we should be up and running in the next month or so.
With all of this in mind, we were very happy to see in the latest budget, the investment in the South West Interconnected grid.
It recognises that, with the aspirations of the state decarbonation targets, we could not support future projects without an upgraded grid network, which also supports increasing demand and greater connection pathways.
Mineral carbonisation opportunity at Mt Keith
So, we’ve had some big wins when it comes to reducing our emissions and it doesn’t end there.
Our teams are also exploring new technology and innovation that could benefit the mining industry globally.
An exciting tech opportunity Nickel West is paving the way on, is the potential for ‘mineral carbonation’ of our Mt Keith tailings.
Mount Keith’s tailings dam has the capacity to store large volumes of carbon from the atmosphere safely and permanently through a natural rock weather process known as mineral carbonation.
It’s where Magnesium Oxide in the tailings reacts directly with carbon dioxide in the atmosphere to geologically sequester, or trap, the carbon in rock through the formation of mineral carbonates.
We already know it is storing around 40,000 tonnes of carbon dioxide per year but could store millions each year subject to the successful deployment of new technologies and innovative solutions being researched with the aim of enhancing the reaction rate.
Essentially, it has the potential to be one of the world’s biggest mineral carbon sinks.
As we work to get there, I’m pleased to say that we’ve partnered with major universities and experts globally, including Professor Greg Dipple, the world’s leading research professor from University of British Columbia and co-founder of mineral carbonation company Arca Climate.
This sort of innovation and collaborative work with the aim of accelerating the decarbonisation of our operations is really exciting to see, and it’s happening right here in Western Australia.
FY23 – a big year for Nickel West
As I reflect on the last financial year, it’s been challenging but exciting, and we’ve also seen good progress between government and industry more broadly.
With the acquisition of OZ Minerals in May, we were very pleased to welcome the OZ team into BHP. The acquisition strengthens BHP’s portfolio in copper and nickel as we work to help meet the increasing demand for these products.
The West Musgrave nickel project here in WA has now become part of our nickel business, and our expanded Nickel West team is focused on helping us identify and study options for local synergies, align on strategic focus, and ensure our stakeholders receive a consistent and coordinated experience when engaging with us.
There are many opportunities here for us to collaborate and share skills and capabilities across our operations and we are already benefitting from working together.
The project is in early stages of execution following a final investment decision by OZ last September.
Moving back to the Goldfields, I mentioned earlier that our Kalgoorlie Nickel Smelter had reached 50 years of operations and we recently celebrated the milestone with a big community open day.
It has been a huge part of the Kalgoorlie community for all its 50 years, supporting generations of local families and businesses through employment opportunities, investing in the community, and contributing to the economy.
Right now, our team is doing a lot of preliminary planning work for our smelter renewal project, which could potentially provide more nickel from our northern mining operations, sustain our integrated supply chain for the electric vehicle market and create a pathway for additional feed sources.
It’s an important step in our Nickel growth strategy.
The City of Kalgoorlie Boulder has accepted our expression of interest in a piece of land where we plan to house a temporary, 1000-bed construction village to support the project.
If you know Kalgoorlie, then you know accommodation can be tight, so this is one of the ways we are working with others – community, council, service providers etc., to make sure we limit any impact on rental and tourism markets, while still ensuring ongoing and sustainable operations, which we know play such an important role in the future of Kalgoorlie, Nickel West and the WA economy.
It will also mean local opportunities… and we have started seeking expressions of interest from qualified contractor partners to deliver the work.
And if the project progresses to execution… and by that, I mean it is still subject to a number of approvals including an investment decision by our Board…we will be able to create even more opportunities for local business and Indigenous contracting partners, which is incredibly important to us.
It has also been pleasing to work with our peers in the industry, government, the CME and many of you here at the Mining Club to make a real difference in our state.
From industry roundtables and critical minerals strategy and feedback opportunities… to the work undertaken to help inform the state of power requirements.
And of course, the work on safe and respectful mining communities, camps and towns…
These are ways in which we need to continue to use our collective insights and industry strength to drive positive change and ensure that we have a future generation that loves mining as much I do.
That is, being safe, sustainable and continuing to be a competitive partner of choice.
In closing, we recognise we all share the responsibility of building a better future and recognise the role we must play in helping the world achieve its decarbonisation ambitions.
At BHP, we are making significant progress in responsibly delivering essential resources for a decarbonising world.
We intend to supply the world with nickel produced with lower carbon emission intensity, for the energy transition, and help create an economy that is lower greenhouse gas emissions and more sustainable.
As you’ve heard we are deeply committed to not only growing Nickel West to supply more nickel to the market - but doing this as sustainably as possible through reducing our own operational greenhouse gas emissions.
Importantly, we are committed to unlocking more supply chain opportunities, which can help to de-risk the business and increase resilience … most importantly though, it is simply the right thing to do.
This is just a small part of our story - one which we are continuing to create in collaboration with many others.