NEW YORK, Feb. 19, 2020 /PRNewswire/ -- Demand for electric vehicle batteries is pushing up production of nickel, especially in Indonesia, where the government is moving to benefit from its natural resources.
One of the companies on the leading edge of this upward momentum is Pacific Rim Cobalt Corp. (CSE:BOLT) (OTCQB:PCRCF) (XFRA:NXFE) (PCRCF Profile), which is setting out a bold expansion plan following a successful exploration and development season in Indonesia last year. Other companies with interest in nickel production include Honda Motor Company Ltd. (NYSE:HMC), which will be looking for more nickel as it increases its EV range. Tesla Inc. (NASDAQ:TSLA) also continues to push the boundary for EV and has seen its stock rise as the market grows. Toyota Motor Corporation (NYSE:TM) is moving into EV, with millions of alternative fuel vehicles sold in the United States. Panasonic Corp ADR (OTCPK:PCRFY) is working with several of these companies to keep up the EV battery supply.
To view an infographic of this editorial, click here.
Electric Vehicles Spur Mining Boost for Indonesia
In many people's minds, electric vehicles (EV) are associated with big cities in East Asia, North America and Western Europe. These are major markets where new vehicles are making their presence felt, particularly as environmentally conscious consumers seek to retain their personal mobility while protecting the planet from carbon emissions.
But the drive to put more EV on the roads is having a knock-on effect in other regions. Indonesia, a giant in the production of nickel, is seeing both its economy and its global status boosted by the need for nickel in EV batteries. This shift could help turn the country into an economic superpower, which may have significant consequences for companies working there.
Expanding Indonesian Nickel Production
Among the companies developing Indonesia's nickel supply is Pacific Rim Cobalt Corporation (CSE:BOLT) (OTCQB:PCRCF) (XFRA:NXFE), a Canada-based battery metals company with offices in Vancouver, Shanghai, Jakarta and Sentai, Indonesia.
Pacific Rim specializes in acquiring and developing production-grade battery metal projects and is committed to providing these critical metals to companies producing EV batteries. The company has been working towards leveraging its flagship nickel-cobalt Cyclops project by employing a vertically integrated "mineral to market" strategy. Based in Papua Province, nestled at the edge of the Cyclops Mountains, this operation is based in a region rich with nickel deposits, where past operations have confirmed the presence of the mineral.
The Indonesian government, which controls licensing to extract minerals in the country, is aware of the growing interest in the industry. Recently the government updated the mining registration process, in part to encourage companies in this industry.
In light of the favorable government outlook and as a result of its its ongoing efforts, Pacific Rim recently secured government approvals needed from the OMBUDSMAN of the Republic of Indonesia for the Cyclops project to move forward. The nickel and cobalt project has been found fully compliant with the updated mining registration process, meaning it is clear to progress.
Pacific Rim Cobalt CEO Ranjeet Sundher commented: "2019 was a pivotal year for us, and we're pleased to carry this momentum into 2020. Obtaining approval from Indonesia's OMBUDSMAN is an important step toward our goal of securing strategic partnerships and participating in Asia's growing battery metals supply chain."
This milestone marker for Pacific Rim has been possible thanks to the support and connections the company has established. National, regional and local support has been found for the project, which will provide jobs in Papua Province in mining, transport and support services. With government approval in hand, company officials have now begun discussions with potential strategic partners and investors to further develop the operation.
A Global Hub for Electric Vehicle Production
Pacific Rim's operation is well timed to tie in with plans of the Indonesian government.
Indonesia aims to become a global hub in the EV industry supply chain. Not only does the country have rich sources of nickel, it also has direct nautical trade routes to China and Japan. These powerful neighboring countries represent major markets for the materials Indonesia is producing, thanks to Japan's high-tech consumer economy and China's powerful battery industry. Vehicle manufacturers in both countries are focused on becoming leaders in EV, and for that they'll need battery-grade nickel.
To make the most of this opportunity, Indonesian president Joko Widodo has established rules to bolster the EV industry in the country. Through a series of incentives, the government aims to make EV 20% of its car production by 2025. This movement has attracted investment from major EV players. Operations such as the Cyclops project should play a critical role in making that happen.
To support its plan to become a world-leading player in the EV supply chain, Indonesia has stopped export of unprocessed nickel ore. The government has also recently approved environmental impact studies for the completion of several factories designed to produce battery-grade nickel chemicals.
With the Indonesian government providing support for nickel production, and factories being established to process the chemicals, Indonesia won't just be a source of nickel-bearing ore — it will become a major market for the base metal.
Ambitious Plans for Nickel
The Indonesian government's ambitious plans for the country's EV industry are matched by the ambition of the companies working in the region.
For Pacific Rim, this ambition is backed by the company's impressive exploration successes in 2019. Testing on its wholly owned site revealed significant nickel and cobalt mineralization near the surface.
These conclusions are based on several successful operations in the second half of 2019. Excavation and sampling of test pits produced 530 kg of sample materials, which were sent to Canada for bench scale testing. Test results indicate 75 drill holes, 51 augur holes and 11 test pits were used to check mineral levels down to various depths. Combined with historic results from 856 drill holes and 26 test pits, these provide a detailed picture of the mineral profile at the Cyclops site.
With these results in hand, Pacific Corp. has identified ambitious milestones for development in 2020, including the completion of a pilot plant in Canada and a demonstration plant in Indonesia, which would produce battery-grade nickel and cobalt material to suit the growing EV market. The operations and success of these initial operations will be used to develop design criteria for a full commercial scale plant.
A Growing Market
The demand for EV batteries means that demand for nickel is high and looks set to stay that way. According to research by Deloitte, EV sales reached 2 million units globally in 2018 and should reach 4 million units in 2020, expanding to 21 million by 2030. At the same time, the cost of EV battery packs has been falling by 20% per year, making EV a more affordable option for consumers.
CRU Mobility and Energy Futures has predicted that the EV market will need 1.3 million tons of nickel per year by 2030, compared with 600,000 tons in 2018. This means that demand for Pacific Rim's products could more than double in the next decade.
With Indonesia holding 25% of the world's nickel reserves, the country — and companies with operating inside the country — lies at the nexus of these developments. Spending on new nickel processing plants in the country is expected to reach $20 billion by 2024, thanks to the government's efforts to create a world-leading EV supply chain. Companies such as Pacific Rim, with an early position in the country's nickel market, look to be ideally positioned to profit from this.
The EV Nickel Market
The nickel market is increasingly defined by the car manufacturers working in EV.
Honda Motor Company Ltd. (NYSE:HMC) (OTCPK:HNDAF) is making big moves with EV and hybrid vehicles such as the new Fit. The company is increasing its general levels of car production, with a record-breaking year in 2019 for production in China. Critically, Honda is looking beyond the consumer market in its EV work, with a new research agreement with Isuzu to work on heavy-duty trucks driven by electric fuel cells. This would expand the need for EV batteries.
Tesla Inc. (NASDAQ:TSLA) is the name most associated with EV. The company has played a leading role in pushing the industry forward as well as in raising its public profile. The company's stated mission is to accelerate the world's transition to sustainable energy, which means moving transport faster over to EV. Through intense R&D work, the company has pushed its cars to ever greater mileage, while also developing other battery-based projects, such as Megapack utility-scale energy storage. The company's recent stock-price growth reflects increasing investor confidence in the EV sector.
Like other vehicle companies, Toyota Motor Corporation (NYSE:TM) (OTCPK:TOYOF) is moving from traditional engines towards EV. The company has sold more than three million alternative fuel vehicles in the United States alone and is now backing its electric vehicles with an extended-battery warranty. The company also offers some of the most innovative EV on the market, with its Mirai the first zero-emissions vehicle with a range of more than 300 miles.
Panasonic Corp ADR (OTCPK:PCRFY) has entered the vehicle market by providing batteries for car manufacturers. In addition to its partnership with Tesla, Panasonic has established a joint venture with Toyota to produce EV batteries in China and Japan. The latter project is expected to increase Toyota's battery production capacity 50 times over, bringing down the cost of individual batteries and significantly increasing the demand for components such as nickel.
With EV production going through a period of dramatic growth, nickel mining looks to be set for dramatic expansion. Nowhere will this be more noticeable than in the government-supported industry of Indonesia.
For more information about Pacific Rim Cobalt Corp., please visit Pacific Rim Cobalt Corp. (CSE:BOLT) (OTCQB:PCRCF) (XFRA:NXFE).
NetworkNewsWire ("NNW") is a financial news and content distribution company, one of 40+ brands within the InvestorBrandNetwork ("IBN"), that provides: (1) access to a network of wire solutions via NetworkWire to reach all target markets, industries and demographics in the most effective manner possible; (2) article and editorial syndication to 5,000+ news outlets; (3) enhanced press release solutions to ensure maximum impact; (4) social media distribution via IBN millions of social media followers; and (5) a full array of corporate communications solutions. As a multifaceted organization with an extensive team of contributing journalists and writers, NNW is uniquely positioned to best serve private and public companies that desire to reach a wide audience comprising investors, consumers, journalists and the general public. By cutting through the overload of information in today's market, NNW brings its clients unparalleled visibility, recognition and brand awareness. NNW is where news, content and information converge.
To receive SMS text alerts from NetworkNewsWire, text "STOCKS" to 77948 (U.S. Mobile Phones Only)
For more information, please visit: https://www.NetworkNewsWire.com
NetworkNewsWire is part of the InvestorBrandNetwork
DISCLAIMER: NetworkNewsWire (NNW) is the source of the Article and content set forth above. References to any issuer other than the profiled issuer are intended solely to identify industry participants and do not constitute an endorsement of any issuer and do not constitute a comparison to the profiled issuer. FN Media Group (FNM) is a third-party publisher and news dissemination service provider, which disseminates electronic information through multiple online media channels. FNM is NOT affiliated with NNW or any company mentioned herein. The commentary, views and opinions expressed in this release by NNW are solely those of NNW and are not shared by and do not reflect in any manner the views or opinions of FNM. Readers of this Article and content agree that they cannot and will not seek to hold liable NNW and FNM for any investment decisions by their readers or subscribers. NNW and FNM and their respective affiliated companies are a news dissemination and financial marketing solutions provider and are NOT registered broker-dealers/analysts/investment advisers, hold no investment licenses and may NOT sell, offer to sell or offer to buy any security.
The Article and content related to the profiled company represent the personal and subjective views of the Author, and are subject to change at any time without notice. The information provided in the Article and the content has been obtained from sources which the Author believes to be reliable. However, the Author has not independently verified or otherwise investigated all such information. None of the Author, NNW, FNM, or any of their respective affiliates, guarantee the accuracy or completeness of any such information. This Article and content are not, and should not be regarded as investment advice or as a recommendation regarding any particular security or course of action; readers are strongly urged to speak with their own investment advisor and review all of the profiled issuer's filings made with the Securities and Exchange Commission before making any investment decisions and should understand the risks associated with an investment in the profiled issuer's securities, including, but not limited to, the complete loss of your investment.
NNW & FNM HOLDS NO SHARES OF ANY COMPANY NAMED IN THIS RELEASE.
This release contains "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E the Securities Exchange Act of 1934, as amended and such forward-looking statements are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. "Forward-looking statements" describe future expectations, plans, results, or strategies and are generally preceded by words such as "may", "future", "plan" or "planned", "will" or "should", "expected," "anticipates", "draft", "eventually" or "projected". You are cautioned that such statements are subject to a multitude of risks and uncertainties that could cause future circumstances, events, or results to differ materially from those projected in the forward-looking statements, including the risks that actual results may differ materially from those projected in the forward-looking statements as a result of various factors, and other risks identified in a company's annual report on Form 10-K or 10-KSB and other filings made by such company with the Securities and Exchange Commission. You should consider these factors in evaluating the forward-looking statements included herein, and not place undue reliance on such statements. The forward-looking statements in this release are made as of the date hereof and NNW and FNM undertake no obligation to update such statements.
Corporate Communications Contact:
FN Media Group, LLC