Nickel Processing Grows with EV Demand, Production Efforts

Written by Jennis Jacob for IIR News (Sugar Land, Texas)

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Summary

Demand for nickel has been rising due to its use in stainless steel and specialty alloys, but also the expansion of lithium-ion battery production for electric vehicles.

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Contributors to Growth

An essential mineral for clean energy, nickel has been rising in demand in recent years. This increase is primarily tied to traditional sectors such as stainless steel and specialty alloys, with stainless steel alone accounting for roughly 70% of global primary nickel use.

Further contributing to this growth is the expansion of lithium-ion battery production for electric vehicles (EVs), where nickel-rich cathodes are used for improving energy density and driving range. At the global level, EV sales are projected to keep rising through the decade, even as growth moderates in certain markets (like the U.S.) due to shifting policy support and economic conditions. Bloomberg estimates passenger EV sales will rise from 1.6 million to 4.1 million during 2025-2030, further increasing demand for processed nickel.

Funding Initiatives

Furthermore, as market momentum for energy-transition materials grows, nations are investing heavily in nickel processing to strengthen domestic production and supply networks. For instance, the U.S. has a strategic focus on defense, critical mineral supply chains and energy security, alongside its role in EV and battery technologies.

Funding initiatives backed by the U.S. Department of Energy (DOE) and Department of Defense (DoD) are aimed at vitalizing domestic production and reducing reliance on foreign suppliers such as China and Indonesia. Recent examples include the DOE's plans to deploy nearly $1 billion to bolster the mining and processing of critical minerals, including nickel; and a $7 million award from the DoD to expand nickel and cobalt processing capacity in Missouri.

Elsewhere, the Philippines has been increasing nickel production to capitalize on rising demand from stainless steel and electric-vehicle battery markets, while seeking to move beyond ore exports by developing domestic processing capabilities. Australia, a major resource holder and producer, is navigating a downturn in nickel development, as a surge of lower-cost Indonesian supply flooded the global market and temporarily undermined price competitiveness. Indonesia, on the other hand, is emerging as a nickel processing market by utilizing its rich reserves and maintaining low-cost production and an export ban on unprocessed nickel ore to encourage domestic output.

On the processing front, producing battery-grade nickel can be challenging. It requires advanced refining technologies, stringent quality controls and substantial energy inputs. At the same time, producers are expected to cut emissions, manage waste responsibly and improve traceability across the value chain through tighter regulatory frameworks, customer standards, and evolving Environmental, Social and Governance (ESG) requirements. This leads to implications for costs, sustainability, and long-term supply security.

Nickel Investments

Currently, there is a total spend pipeline worth more than US$22 billion across 74 active capital-spending projects, geared at nickel smelting and refining, according to Industrial Info's Global Market Intelligence (GMI). About 14% of the overall spend is going toward the ESG initiatives. Subscribers to the GMI Metals & Minerals Project Database can learn more from a list of detailed project reports.

While 48% of this potential spending is dedicated to new grassroot developments, 19% is aimed at unit additions, 16% at plant expansions and 13% at restarts.

By region, North America is attracting the highest spending level, amounting to more than US$12 billion and accounting for 58% of the total market share. Asia and Oceania are also tracking investments worth more than US$6 billion (27%) and US$2 billion (11%) each.

By country, the U.S. has the highest potential investment, worth more than US$11 billion. After the U.S., the Philippines and Australia have investments of more than US$2 billion each. Indonesia, Vietnam and Canada are driving investments of more than US$1 billion each. Other countries like Brazil, China, Russia and Japan are also driving potential investments.

With an aggregate spending of more than US$13 billion, TMC The Metals Company Incorporated (British Columbia, Canada), Top Frontier Investment Holdings, Incorporated (Metro Manila, Philippines), and Queensland Pacific Metals Limited (Queensland, Australia) are emerging as the key players in the market.

While 95% of the spending is in the planning phase, 4% is being engineered, and 1% is under construction. A majority of the projects are expected to reach completion between December 2025 to March 2034, while the remaining will be completed before March 2037.

The future outlook for smelting and refining capacities hinges on sustained investment to expand capacity, improve efficiency, and lower carbon intensity, while remaining competitive against low-cost production.

Key Takeaways

• Growing demand for nickel is tied primarily to its use by sectors such as stainless steel and specialty alloys.
• Further contributing to this growth is the expansion of lithium-ion battery production for electric vehicles.
• There is a spend pipeline worth more than US$22 billion for nickel smelting and refining projects.

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About Industrial Info Resources
Industrial Info Resources (IIR) is the leading provider of industrial market intelligence. Since 1983, IIR has provided comprehensive research, news and analysis on the industrial process, manufacturing and energy related industries. IIR's Global Market Intelligence (GMI) helps companies identify and pursue trends across multiple markets with access to real, qualified and validated plant and project opportunities. Across the world, IIR is tracking over 200,000 current and future projects worth $17.8 Trillion (USD).