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ASX Nickel Stocks: 5 Biggest Companies in 2023
Nickel is shaping up to be a vital metal in the age of technology. Here's a look at the top five ASX nickel-mining stocks by market cap.
Nickel is a key component in both the industrial and technology sectors.
Traditionally, nickel has been used in alloys such as stainless steel. However, in recent years, growing demand for lithium-ion batteries has brought attention to the base metal's role in the quickly developing battery sector.
In terms of price performance, nickel hit a record of US$100,000 per tonne in March 2022 before the London Metal Exchange had to halt trading — the exchange even had to cancel some trades. Once trading resumed, nickel prices deflated to US$19,333 in mid-July. The metal finished 2022 in the US$25,000 to US$31,000 range, and while it's fallen in 2023 to around the US$20,000 mark, nickel is still at highs not seen since 2011 — the 2022 jump to US$100,000 notwithstanding.
Overall, experts are positive on the outlook for nickel, with stainless steel demand and increasing lithium-ion battery demand predicted to tug prices upward over the next decade. Investors who want to get exposure to these trends may want to consider the biggest ASX nickel stocks by market cap, and the Investing News Network has listed the five largest below.
Data for this list was gathered using TradingView's stock screener. All values were accurate as of August 16, 2023.
Market cap: AU$225.99 billion; current share price: AU$43.11
BHP (ASX:BHP,NYSE:BHP,LSE:BHP) is a diversified mining company with headquarters in Melbourne, Australia. Worldwide, BHP runs dozens of mines that span North and South America and Australia. The company produces nickel sulphide ore out of its operations in Western Australia's Northern Goldfields area. It covers the mining, development and production of nickel until both matte and metal are ready to be shipped to markets. BHP sells over 85 percent of its nickel to the electric vehicle (EV) industry.
BHP is on its way toward net-zero nickel production. In September 2022, its Nickel West division signed a deal with renewable energy company Enel Green Power to begin construction of the Flat Rocks wind farm in Western Australia. Construction is now underway, and the wind farm is expected to reduce Nickel West's carbon emissions by about 32 percent. The project is set to include 18 wind turbines, which will be the tallest wind turbines in Western Australia.
Market cap: AU$9.73 billion; current share price: AU$12.58
IGO (ASX:IGO) is a diversified miner that produces several different metals, but its focus is on its 100 percent owned Nova nickel-copper-cobalt operation. Nova is located in Western Australia's Fraser Range and primarily produces nickel; its output came in at 26,675 tonnes of nickel in its 2021 financial year, and its 2022 guidance was set at 25,000 to 27,000 tonnes of nickel.
Nova ultimately produced 26,675 tonnes of nickel at a cash cost of AU$1.95 per pound, coming in at the high end of its guidance. For 2023, its output is predicted to range from 24,000 to 27,000 tonnes at a cash cost of AU$2.60 to AU$3.00 per pound.
3. Nickel Industries
Market cap: AU$2.61 billion; current share price: AU$0.76
New South Wales-based Nickel Industries (ASX:NIC), formerly Nickel Mines, is a significant producer of nickel pig iron, a critical component in manufacturing stainless steel. The company began producing high-grade nickel matte for EVs in 2022.
Nickel Industries has 80 percent interests in multiple nickel rotary kiln electric furnace (RKEF) operations in Indonesia: Hengjaya Nickel, Oracle Nickel and Ranger Nickel in the Morowali Industrial Park, and Angel Nickel in the Weda Bay Industrial Park. The company also has an 80 percent interest in the Hengjaya nickel mine, located near the Morowali Industrial Park.
In the 2022 financial year, Nickel Industries' RKEF operations produced a combined 473,116 tonnes of nickel pig iron containing 65,336 tonnes of nickel metal. Nickel metal in nickel matte production at Hengjaya Nickel came in at 4,743 tonnes; while it is currently the company's only RKEF project producing nickel matte, a nickel matte convertor may be constructed at Oracle Nickel in the future. As for the company's mine, it produced 6.8 million tonnes of ore last year.
4. Centaurus Metals
Market cap: AU$480.50 million; current share price: AU$1.13
Centaurus Metals (ASX:CTM) is a mining and development company based in Brazil. According to the company, its goal is to become a major supplier of nickel sulphide to help provide for a cleaner and greener future. The company has its sights set on the development of its wholly owned Jaguar project, which is located in Brazil's Carajás mineral province.
Centaurus' most recent mineral resource estimate for Jaguar, which was released in November 2022, comprises 109.2 million tonnes at 0.87 percent nickel. The company expects to update the estimate in Q1 2024.
5. Lunnon Metals
Market cap: AU$192.53 million; current share price: AU$0.92
Lunnon Metals (ASX:LM8) is an exploration company operating in Western Australia's Kambalda nickel district. Lunnon owns a portfolio of four past-producing nickel mines in the Kambalda nickel project: Foster, Baker, Silver Lake and Fisher.
In May 2023, Lunnon released a prefeasibility study for the Baker project, establishing a probable ore reserve of 612,000 tonnes containing 2.86 percent nickel; that amounts to 17,500 tonnes of contained nickel. The company is focusing on performing studies at Foster, which has 57,000 tonnes of accessible nickel metal, in the second half of 2023.
FAQs for nickel investing
What is nickel used for?
Nickel has a variety of applications. Its main use is as an alloy material for products such as stainless steel, and it is also used for plating metals to reduce corrosion. As its name suggests, nickel is used in coins as well, such as the 5 cent nickel in Australia, the US and Canada; Australian and US nickels are made up of 25 percent nickel and 75 percent copper, while Canada's nickel has nickel plating that makes up 2 percent of its composition.
Nickel demand is increasing from EVs, where the metal is a component of certain lithium-ion battery compositions; it has gotten extra attention because of that purpose.
Is nickel a good investment?
Nickel's role in EV batteries has seen it gain increased investor attention. In fact, its price spiked to an all-time high in 2022, and it remains at levels not seen in over a decade. For investors looking to invest in green metals, nickel could be a strong choice, but everyone should perform their own due diligence to decide whether it is the right fit for their portfolio.
How to invest in a nickel ETF?
Exchange-traded funds (ETFs) can be a good option for investors who prefer a safer approach to investing in a sector. ETFs can be purchased the same as any other stock, which means you can invest in them using stock brokers and investing apps. Although there are no pure-play nickel ETFs, some ETF options to add the metal to your portfolio include the iShares S&P/TSX Global Base Metals Index ETF (TSX:XBM) and the VanEck Green Metals ETF (ARCA:GMET).
Article by Matthew Flood; FAQs by Lauren Kelly.
This is an updated version of an article first published by the Investing News Network in 2018.
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Securities Disclosure: I, Matthew Flood, hold no direct investment interest in any company mentioned in this article.
Securities Disclosure: I, Lauren Kelly, hold no direct investment interest in any company mentioned in this article.