The Elements of Innovation Discovered
The Elements of Innovation Discovered
Critical Minerals Alliances - August 7, 2025
Global oversupply prompted BHP to suspend operations at Nickel West, one of the world's cleanest sources of battery-grade nickel.
Nickel plays two major roles in modern industry: about 70% of global output strengthens stainless steel and other alloys, while the rest goes to batteries.
Developers are exploring applications for nickel beyond battery markets.
Talon Metals' Tamarack nickel mine project in Minnesota is emerging as a key pillar of domestic supply.
A nickel processing plant in Indonesia.
As governments tighten critical mineral policies and investors hedge their bets, this year's global nickel market is recalibrating under intense pressure, with the metal playing two major roles in modern industry: approximately 70% of global output provides strength and corrosion resistance to stainless steel and other alloys, while high-purity nickel underpins energy-dense lithium-ion battery chemistries used in electric vehicles (EVs) and batteries used in rechargeable devices from power tools to digital cameras.
Yet the metal's dual identity – essential to both legacy industries and clean energy technologies – is now caught in a global reset, shaped by evolving battery chemistries, new demand patterns, and widening regional disparities.
Due to slowing demand for EV-related applications, developers are exploring industrial and specialized applications for nickel beyond battery markets. Concurrently, battery innovation is progressing beyond traditional nickel-forward chemistries. Low-cost sodium-ion and solid-state technologies are maturing, prompting the exploration of new uses for nickel, including green hydrogen electrolysis and high-temperature alloys in renewable energy and defense sectors.
In China and Europe, saturated urban markets and reduced subsidies are also tempering demand, with automakers adjusting forecasts and battery manufacturers diversifying chemistries, further weakening the growth curve that previously underpinned nickel's bullish outlook.
Oversupply and geopolitical uncertainty have also pushed prices to multi-year lows. From Indonesian jungles, matte and pig iron are being exported to China at record levels, while across the Pacific, Canadian producers are shuttering operations and American companies are scrambling to source cleaner, traceable nickel.
These crosscurrents are reshaping supply priorities and straining high-cost producers around the world.
Beyond mining, the U.S. is building out a resilient supply chain by strengthening trade alliances with resource-rich allies such as Canada and Australia. These partnerships reduce exposure to geopolitical risks and supply disruptions.
"The market is in oversupply, and in Indonesia, several projects in the pipeline will be completed soon, increasing production capacity," Macquarie analyst Jim Lennon told an industry conference organized by Shanghai Metals Market in Jakarta.
Nickel plays two major roles in modern industry: about 70% of global output strengthens stainless steel and other alloys, while the rest goes to batteries.
Through a combination of raw ore export bans and a concerted drive to expand domestic smelting, Indonesia – supplier of more than half the world's nickel – has redefined the structure of global supply. The resulting surge in output has driven prices on the London Metal Exchange below $15,000 per metric ton, marking a four-year low.
In response to mounting oversupply, the Indonesian government reduced its 2025 production quota by nearly half, though enforcement remains inconsistent, downstream growth continues, and total output is still projected to reach nearly 300 million metric tons in the year ahead.
While Indonesia operates profitably at lower prices, its nickel is under growing scrutiny due to its environmental impact, labor conditions, and use of geopolitical leverage.
The country has rapidly become the world's top producer by flooding the market with low-cost nickel, much of it linked to emissions-intensive processes such as high-pressure acid leaching, which generates toxic waste. In order to extract nickel from Indonesia's laterite ores at scale, large areas of rainforest are stripped, leading to deforestation, habitat loss, and soil erosion. Additionally, the industry relies heavily on coal power.
Further, the country's downstream policies – banning raw ore exports to force local refining – have concentrated global supply in a region with lax environmental enforcement and increasing Chinese control, raising concerns about sustainability and ethical sourcing.
As nickel prices fall, miners in higher-cost regions struggle to remain viable, leaving more sustainable sources under financial pressure. This global oversupply and resulting price collapse prompted BHP to suspend operations at Nickel West, considered to be among the world's cleanest sources of battery-grade nickel.
A similar strain contributed to the closure of the Koniambo nickel factory in New Caledonia, where financial instability and operational challenges – exacerbated by low global prices – have had a devastating impact on the local economy and indigenous population.
The resulting divide between low-cost and high-cost producers has sparked calls for consolidation or even strategic withdrawal.
Developers are exploring applications for nickel beyond battery markets.
With growing pressure on companies to meet multiple sustainability standards, supply chain partners increasingly expect traceability and provenance for each shipment. This, in turn, is driving a broader need to embed best practices in how sustainability data is recorded and shared externally – without compromising commercially sensitive information.
These rising expectations are accelerating a pivot toward cleaner nickel – both mined and recycled – as environmental, social, and governance (ESG) compliance becomes a prerequisite for long-term contracts.
Strategic investments in refining, recycling, and low-carbon mining are expected to continue as governments seek long-term supply resilience. To support new projects, the U.S. federal government has deployed funding through the Bipartisan Infrastructure Law and invoked the Defense Production Act to accelerate the development of domestic battery materials, including nickel.
In addition to recycling projects, the Department of Energy is providing $3 billion in battery manufacturing support, boosting domestic processing of nickel, cobalt, lithium, and other critical materials, which reinforces critical mineral resilience.
Western allies are also seeking to "friendshore" a nickel supply chain, aiming to establish security by advancing mining projects, forging international partnerships, and expanding recycling infrastructure. These policy levers aim to diversify sourcing away from China-Indonesia pipelines, while anchoring ESG standards into supply contracts.
In the U.S., Michigan's Eagle Mine, operated by Lundin Mining, remains the only active nickel mine and is nearing the end of its operational life.
Meanwhile, the Trump administration is also moving to lift restrictions on copper-nickel mining that the Obama and Biden administrations alternately imposed near the Boundary Waters Canoe Area Wilderness in northeastern Minnesota – a decision announced in June that threw a lifeline to the proposed Twin Metals Minnesota mine near Ely. The project aims to extract nickel, as well as copper, cobalt, and platinum group metals.
Talon Metals' Tamarack nickel mine project in Minnesota is emerging as a key pillar of domestic supply.
North American nickel is experiencing a surge of activity from newly built refineries and record-breaking drill results to aggressive project timelines and environmental innovations, all reshaping the supply chain with a focus on sustainability and geopolitics.
In the U.S., a major milestone was reached with the launch of the country's first nickel refinery in Oklahoma. Operated by Westwin Elements, the facility currently processes both imported ore and recycled battery material at a demonstration scale, with plans to scale up to 34,000 metric tons annually by 2030. This refinery marks a foundational step toward reshoring critical battery materials processing.
Meanwhile, Talon Metals' Tamarack Project in Minnesota is fast emerging as a key pillar of domestic supply. The company recently reported a record 34.9-meter intercept of high-grade nickel sulfide – the thickest ever recorded onsite – with assays as high as 12.7% nickel. Tamarack has secured $41 million in financing, and formed a processing partnership in North Dakota, with a land-transfer agreement that enables off-site ore processing.
Environmental permitting is underway, with additional drilling exploring new zones beyond previously known resources. The project has also drawn $20.6 million in support from the U.S. Department of Defense, reflecting its strategic importance.
"This award exemplifies the DOD's commitment to strengthening the resilience of critical supply chains and lessening our reliance on foreign sources of vital materials," Anthony Di Stasio, director of the Defense Department's manufacturing expansion office, said in a press statement.
In Canada, the Crawford Nickel Project near Timmins, Ontario, led by Canada Nickel Company, is moving rapidly through permitting with ambitions to begin production by 2027–2028. The project includes plans for a billion-dollar nickel processing plant and benefits from over $600 million in refundable tax credits.
Canada Nickel has also expanded its footprint by acquiring the nearby Texmont mine, enhancing its control over the Timmins nickel district. In parallel, Indigenous-led permitting frameworks in Ontario's Ring of Fire region are gaining traction, laying the groundwork for future development.
Together, these developments mark a significant shift toward establishing a cleaner, more secure North American nickel supply chain.
A nickel processing plant in Indonesia.
Bypassing years of permitting hurdles and international politics, recycling companies are stepping in to fill the domestic gap.
Redwood Materials in Nevada is leading the way, recovering up to 98% of key battery metals – including nickel – from end-of-life lithium-ion batteries. The company has partnered with major manufacturers such as Panasonic, Toyota, and GM to create a closed-loop supply chain for critical minerals.
In Ohio, Nth Cycle's modular "Oyster" electro-extraction plant began full operations in late 2024, becoming the first U.S. facility to commercialize low-emission nickel and cobalt recovery from scrap. Industrial giants such as Caterpillar have backed the company, signaling confidence in U.S. recycling innovation.
Other firms, including American Battery Technology Company, are scaling up hydrometallurgical systems to recover nickel from battery waste.
This shift toward circular recovery aims to reduce import dependence, minimize environmental damage, and meet escalating traceability demands from automakers and defense contractors alike. In parallel, the nickel market is navigating oversupply, environmental scrutiny, and technological transition –prompting a broader shift in focus from volume to production values.
With China and Chinese-backed Indonesian production dominating through carbon-intensive means, and Western nations striving to build cleaner, traceable, and geopolitically secure alternatives, the global nickel industry stands at a crossroads.
Whether through state-backed mining, strategic alliances, or high-tech recycling, the next chapter of nickel will not be written solely underground – it will be shaped by innovation, accountability, and the urgency of energy transition.
Looking ahead, nickel is unlikely to experience a dramatic demand rebound in the near term, but the groundwork for a more resilient market is taking shape. This will likely include continued investment in low-emission projects, recycling capacity, and allied supply chains, reinforcing a shift in focus from volume to standards.
High-purity, ESG-compliant nickel – whether mined domestically or recovered from waste – will command a premium, and automakers and tech manufacturers will be given the choice to align sourcing with policy mandates and consumer scrutiny, or buckle to international pressures.
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