At a depth of almost 1,000 meters below the earth’s surface, explosives break through rock that’s billions of years old to extract a critical mineral: Nickel.
Image: Carboncredits
Harder than iron, as durable as copper but superior in its resistance to oxidation and corrosion, nickel serves a multitude of industries (including the production of stainless steel, which consumes nearly 80% of the world’s nickel supply).
With the global electric vehicle market booming amid urgent climate action, metals capable of long-term energy storage are in high demand. Nickel is no exception. This lustrous, silvery-white metal is sought after globally.
Speaking of nickel’s “heat,” Forbes wrote back in 2019, “Gold is hot, but there’s another metal that’s even hotter: Nickel.” The American magazine substantiated this claim by showing that, in the middle of 2019, nickel delivered twice the performance of gold with a 30% increase compared to gold’s 13% rise. This gap could widen further in the future as nickel supply stagnates and demand accelerates in the electric vehicle battery and energy storage sectors.
This in-demand metal is also found in Vietnam, concentrated in the northern provinces. According to a 2021 study by ThS. Dao Cong Vu from the Institute of Mining and Metallurgy (Ministry of Industry and Trade), Vietnam’s total nickel reserves and resources are estimated at approximately 3.6 million tons of nickel metal, mainly in Thanh Hoa (3,067,020 tons), Son La (420,523 tons), and Cao Bang (133,677 tons).
While Vietnam’s reserves are not abundant compared to other countries, producing nickel salts and using nickel ore for battery manufacturing can bring dual benefits. This approach can meet the needs of the growing electric vehicle and renewable energy sectors while harnessing the potential of Vietnam’s valuable natural resources.
Nickel to Stir Up the Global Market in 2025
As of mid-2024, the global nickel market remains in short-term surplus. However, despite these short-term pressures, nickel’s role as a critical component in the green transition, especially in electric vehicle batteries, remains significant, according to ING Bank (Netherlands).
The International Nickel Study Group (INSG) has just updated its nickel market forecast, explaining that the surplus will narrow to 135,000 tons by 2025, with production rising to 3.649 million tons and demand increasing to 3.514 million tons.
The year 2025 could be a turning point, sending nickel prices skyrocketing. Bloomberg reports that the Indonesian government is considering cutting its nickel mining quota by nearly 40% in 2025. According to Macquarie Group Ltd, the restrictions proposed by the Indonesian government on nickel mining could “reduce global supply by more than a third, thus pushing up prices.”
A recent analysis by Benchmark explained the key trends and risks shaping the future of this energy transition material, focusing on nickel. Specifically, by 2034, nickel is expected to face a shortage of 839,000 tons—nearly seven times the current surplus. This highlights the urgent need to address the supply shortfall.
Soaring demand for electric vehicles has driven up the price of metals capable of long-term energy storage. Image: Internet
Benchmark states that the world needs to invest approximately $514 billion (with $220 billion allocated to upstream projects) to meet global battery demand by 2030. Of this, nickel alone requires $66 billion—the highest among all green materials. Without these investments, sustaining the rapidly expanding EV market could become significantly challenging.
Benchmark further explains how the nickel market is struggling with slow project development. While large-scale production and processing plants can become operational within five years, mines typically take between 5 and 25 years to develop. This imbalance creates a “supply-demand disconnect” for nickel, threatening the EV supply chain.
Nickel’s role in the energy transition demands immediate investment in extraction. Without sufficient raw materials, even the most advanced gigafactories (a term for electric vehicle battery manufacturing facilities) will fall short of EV production targets. Addressing this resource shortfall is crucial to stabilizing the supply chain.
As demand for nickel continues to rise, securing the necessary $66 billion investment will be vital to meeting the challenges ahead by 2025. However, the market’s future hinges on addressing supply shortfalls and adapting to shifting global dynamics.
The U.S. Department of Energy’s Critical Materials Assessment, published in 2024, classified nickel as a near-critical material (along with uranium, platinum, magnesium, etc.). This classification underscores nickel’s increasing importance in green energy applications and supply risks.
The International Energy Forum (IEF) assesses nickel as a versatile metal. Evolving beyond its traditional use in stainless steel, nickel has emerged as a critical element in green technology, with the IEA projecting a 65% increase in demand by the end of this decade.
This demand is driven not only by the electric vehicle market but also by the broader energy transition—nickel is essential for high-performance alloys used in wind turbines and solar panels, as well as catalysts for green hydrogen production.
References: Forbes, Carboncredits, USGS, Vietnam Ministry of Industry and Trade, International Energy Forum (IEF)
