While many expected the nickel price to continue to rise in 2014 on the back of Indonesia’s ban on unprocessed ore exports, it ultimately fell on concerns over rising stockpiles and predictions that the new rules would soften.
Overall, global nickel production decreased slightly in 2014 compared to the previous year (2,400,000 tonnes vs. 2,630,000 tonnes). Similarly, the nickel price fell 12 percent in 2014, according to the US Geological Survey (USGS), and market watchers are divided about what’s in store going forward — some say production will ramp up, while others say the nickel market will turn in 2015.
Here’s a look at the 10 top nickel-producing countries from 2014, as reported by the USGS.
Mine production: 440,000 tonnes
The Philippines saw a slight decrease in its nickel production from 2013, producing 440,000 tonnes. Even so, the country took advantage of Indonesia’s export ban and stepped in to distribute to China. In fact, the country’s nickel exports to China increased 24 percent in the first 10 months of the year, according to Bloomberg. Much of that came from stockpiles, but the Philippines plans on increasing the number of mines it has, hoping to permanently fill the gap left by Indonesia.
"If Indonesia’s ban goes on we’ll see more new mines in five years,” said Leo Jasareno, director of the Manila-based Mines & Geosciences Bureau. “Nickel will be the darling of mining in the next 10 years.”
Mine production: 260,000 tonnes
Russia also saw a drop in production from 2013, putting out 260,000 tonnes of nickel vs. 275,000 tonnes the previous year. While the Indonesian ban threw a wrench in the works for some companies and end users, Russia had its own export barriers to deal with. According to a 2014 article from the CBC, sanctions limited the country’s exports to the US and UK in light of last year’s tensions between Russia and Ukraine. While that didn’t keep the country from producing, it did shift its focus to Asian purchasers.
"Well, the problem with sanctions is very porous,” said Donald Rumball, a Toronto-based analyst. “If Russia was stopped from selling nickel, what would stop it from selling to China and Indonesia and Vietnam and who else.”
Mine production: 240,000 tonnes
Indonesia experienced a drastic cut in production from last year, with its output dropping from 2013′s 440,000 tonnes to just 240,000 tonnes. Most of that drop was due to the country’s export ban on unprocessed ores, which came into effect in January. With the ban, Indonesia is aiming to reap additional benefits from its natural resources by forcing companies to process ore domestically. However, the move led to thousands of job cuts, and economists have warned that the short-term negative effects of the ban will be extremely costly for Indonesia’s fragile economy.
Mine production: 233,000 tonnes
Canada saw mild gains in its nickel production from 2013 to 2014, producing 223,000 tonnes of nickel last year. Like other countries, Canada is looking to the Indonesian ban as a catalyst to increase production, and believes it could benefit not only via output growth, but by also adding jobs to its economy, according to a 2014 report from The Globe and Mail.
"We would have the additional jobs around refining and of course the value added inside the economy would be augmented that much more,” said Peter Hall, chief economist with Export Development Canada.
Mine production: 220,000 tonnes
Australia’s nickel production dropped from 234,000 million tonnes in 2013 to 220,000 tonnes in 2014. However, according to a Platts article from 2014, that decline was expected. The country is currently starting new mines in three states and expects to begin boosting output by 2018.
6. New Caledonia
Mine production: 165,000 tonnes
Like Canada, New Caledonia saw its nickel production gain marginally in 2014, rising from 2013′s 164,000 tonnes to 165,000 tonnes. Caltrac, which is an arm of Hastings Deering, is expanding mining operations in the country and opened a state-of-the-art maintenance facility in October. The new facility has six operational bays compared to two at the previous facility, according to Mining Australia
"We are one of the leading commercial entities in New Caledonia and deeply involved in the business life of the region,” said Michele Verges, Caltrac’s director general.
Mine production: 126,000 tonnes
Brazil also saw a decrease in nickel production in 2014, falling short of 2013′s 138,000 tonnes. However, as MINING.com notes, companies in the country saw record-hitting increases as the year progressed. For example, Vale (NYSE:VALE), which is a global leader in nickel production, saw an increase of 18.7 percent from the previous year in the third quarter.
Mine production: 100,000 tonnes
China increased its nickel production in 2014 by roughly 5,000 tonnes compared to its 2013 total. According to Reuters, China is the world’s leading producer of nickel pig iron , which is a low-grade ferronickel used in stainless steel. When the price of nickel ore nearly doubled between February and April, that raised the cost of production for nickel pig iron, as demand for the material stayed low due to overcapacity in China’s stainless steel sector.
Mine production: 75,000 tonnes
Colombia’s production stayed relatively constant from 2013 to 2014. However, according to Bloomberg, production could have gone differently had a mining strike gone ahead in the country. The action was a response to workers being angry over extended hours. However, the strike was refused by the union in November and mines continued to operate as normal.
"This is something of a knee-jerk reaction from Colombia that a mine strike had been expected, but is no longer going ahead,” said Nic Brown, head of commodities research at Natixis (EPA:KN) in London. “If you take away the potential strike, the picture is not quite as positive as the market thought it was.”
Mine production: 66,000 tonnes
Cuba also recorded similar levels of nickel production from 2013 to 2014. According to Reuters, the country cut production at one of its two nickel plants last year to focus on maintenance and capital improvements at the facility.