St George Mining Ltd is in talks with a Chinese battery manufacturer that is interested in buying a stake in the Australian nickel producer, Executive Chairman John Prineas said on Wednesday.
The interest from the Chinese company, which Prineas declined to identify, underscores the massive appetite for minerals used to make electric vehicle batteries. Nickel is a key ingredient used to make battery cathodes.
"We're big believers in the electric vehicle theme," Prineas said in an interview on the sidelines of the Mines and Money conference in New York. "There definitely is a push toward more nickel-dominant batteries."
Many of the so-called electric vehicle battery "gigafactories" being built around the world are configured to produce cathodes with a 811 nickel-cobalt-manganese chemistry, which is 80 percent comprised of nickel, rather than other cathode compositions, which use equal parts of all three minerals.
That has fueled speculation that nickel will supplant cobalt as a major battery mineral. Cobalt is primarily mined in the Democratic Republic of the Congo, and some extraction techniques - especially using child labor - have made its use deeply unpopular across the battery industry.
Prineas cited data from Benchmark Minerals showing that if all of the 70 EV battery gigafactories under construction around the world come online, global nickel demand would spike 19 times.
Despite that rising demand, nickel prices have not surged. Prices for the metal are up 14 percent so far this year, but remain 19 percent below year-ago levels.
"This rising demand for nickel will be reflected in the price in due course," Prineas said.
Shares of St George have gained about 14 percent so far this year in Sydney trading.
(By Ernest Scheyder; Editing by Cynthia Osterman)