At a depth of almost 1,000 meters below the earth’s surface, explosives break through ancient rock to extract a critical mineral that plays a key role in reducing carbon emissions: Nickel.
Image: Carboncredits
Harder than iron, as durable as copper but superior in its resistance to oxidation and corrosion, nickel serves a variety 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, silver-white metal is sought after globally.
Highlighting nickel’s “heat,” Forbes wrote back in 2019, “Gold is hot, but there’s another metal that’s even hotter: Nickel.” The American magazine demonstrated that with a 30% increase in two months during 2019, nickel outperformed gold, which only rose by 13% in the same period. 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 reserves and nickel resources are estimated at about 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 continues to experience a short-term surplus. However, despite these short-term pressures, nickel’s role as a crucial 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 reaching 3.649 million tons and demand increasing to 3.514 million tons.
The year 2025 could be a turning point, sending nickel prices soaring. 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, 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 underscores the urgent need to address supply constraints.
Soaring demand for electric vehicles has driven up the prices of metals capable of long-term energy storage. Image: Internet
Benchmark states that the world needs to invest around $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 will fall short of EV production targets. Addressing this resource shortage is crucial to stabilizing the supply chain.
As demand for nickel continues to rise, securing the necessary $66 billion investment will be vital to meet the challenges ahead by 2025. However, the market’s future depends on addressing supply shortages 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, and magnesium). 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. Emerging from the stainless steel industry, nickel has become a crucial element in green technology, with the IEA estimating a 65% increase in demand by the end of this decade.
References: Forbes, Carboncredits, USGS, Vietnam Ministry of Industry and Trade, International Energy Forum (IEF)
