Trimegah Bangun Persada

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Will LFP Undermine the Prospects of Nickel-Based Batteries?

06 March 2024

It has been suggested that batteries made from lithium ferro phosphate (LFP) could erode the prospects of nickel, a commodity that is expected to become Indonesia's mainstay in the future. Cheaper prices, greater heat resistance, and non-flammability are the key factors. But what do nickel industry players think?

Director of Health, Safety, and Environment (HSE) at PT Trimegah Bangun Persada Tbk (Harita Nickel), Tonny H. Gultom is confident that nickel, manganese, and cobalt (NMC)-based batteries will remain a common feature of electric vehicles in the future. The reason for this being that nickel-based batteries can store more electrical energy and last longer. Moreover, nickel-based batteries are particularly resistant to fluctuations in climate.

"Nickel-based batteries are generally well-suited to use in electric cars, especially for users who need to drive long distances and in areas prone to significant changes in climate and temperature," says Tonny.

Tonny also explains that, while LFP-based batteries are already being used in various types of vehicles, this technology remains in its infancy. As the need arises for larger capacity and longer life battery technology, nickel batteries will be able to fulfil these requirements.

Nickel-based batteries also have a lower carbon footprint because they can be recycled. That makes this battery better aligned with sustainable development goals (SDGs). With that in mind, it stands to reason that the European Union is currently drafting regulations that will stipulate the use of recycled batteries as standard in electric vehicles.

“It is hoped that the use of nickel-based batteries can answer this challenge, because they can be recycled and used again in accordance with the principles of a circular economy,” stressed Tonny.

NCKL Optimism

The company with the issuer code NCKL remains optimistic about the future prospects of nickel. As Tonny explains, future demand for nickel will be supported by the need for stainless steel and electric vehicle batteries.

Tonny continues by adding that Ferronickel, which is a derivative product of high-grade nickel ore (saprolite), is still in demand among various sectors, including automotive, health, and household appliances. “Meanwhile, opportunities for low-grade nickel ore derivative products (limonite) in the form of mixed hydroxide precipitate (MHP), nickel sulfate, and cobalt sulfate as products for electric vehicle batteries are many and varied in the energy transition era,” said Tonny.

Tonny remains cognizant that challenging macroeconomic conditions and Indonesia's nickel productivity are affecting the world nickel market. Nevertheless, a new equilibrium will be found in future between demand, supply, and world nickel prices.

Tonny is optimistic that future improvements to global economic conditions will help boost demand for nickel derivative products and improve the prospects of the nickel industry as a whole. Consequently, current world nickel market conditions do not affect the company's production targets or investment plans.

“At this moment in time, we continue operating according to capacity and targets,” he concluded.

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