Finnish nickel producer, Trafigura tap electric vehicle boom

A general view of Talvivaara's nickel mine in Sotkamo
FILE PHOTO - A general view of Talvivaara's nickel mine in Sotkamo January 16, 2013, in this picture provided by Lehtikuva. REUTERS/Kimmo Rauatmaa/Lehtikuva

November 10, 2017

HELSINKI (Reuters) – Finland’s Terrafame nickel mine is planning to start producing material for electric vehicle batteries by 2020, the company said on Friday, after securing $200 million more in funding from commodities trader Trafigura Group.

Trafigura, which will also increase its nickel and cobalt sulphides offtake agreement with Terraframe, is providing the funds with Galena Asset Management and Nordic fund Sampo Plc.

“The new funding package … is a significant factor enabling Terrafame to move from established industrial operations to investing in new business opportunities associated with the electric vehicle battery segment,” Trafigura said in a statement on Friday.

With the electric vehicle revolution gaining speed, miners and metals traders are racing to shore up supply deals with battery makers. This deal will help Trafigura compete on the trading side with rival mining and trading giant Glencore that already dominates cobalt supplies with its assets in the Democratic Republic of Congo.

Terraframe, formerly known as Talvivaara, has been under government control since 2015 after years of losses and production problems. It returned to profit last year and commodities trader Trafigura agreed in February to take a stake and help to ramp up production.

Terrafame said it plans to build a new chemical plant by 2020, which would convert nickel into a valuable form of sulphate, a powder-like substance particularly suited for use in batteries.

Most electric vehicles rely on lithium-ion batteries, with the main component comprised mostly of nickel.

Lithium batteries, which keep a charge over longer distances, are being installed in electric cars from Tesla’s top-of-the-line Model X to General Motors’ more modestly priced Chevy Bolt.

“The availability of nickel and cobalt is critical for the electric vehicles market to continue developing. As a producer of these metals, Terrafame is aiming to take a leading role in supplying battery manufacturers,” Terrafame CEO Joni Lukkaroinen said in a statement.

The new plant would have annual capacity of about 150,000 tonnes of nickel sulphate, which Terrafame said would make it one of the largest producers globally.

The company said it expects to make a final decision on the investment in the first half of 2018.

Trafigura added in its statement that it will market all of Terraframe’s forthcoming nickel and cobalt products until end 2027. The trader already takes all of Terraframe’s existing output of nickel and cobalt sulphides.

Trafigura added it has extended its current offtake agreement for 80 percent of Terraframe’s zinc sulphide precipitates until end 2027.

(Reporting by Tuomas Forsell in Helsinki and Julia Payne in London; Editing by David Goodman and David Evans)

  • Steve_VG

    In October’s Society of Automotive Journal, it talks about Mazda’s new compression ignition engine. It also talks about the O’bummers administration making GM shelf their test vehicles already using this technology 8 years ago in order to receive bailout money. GM was told to start looking at electric vehicles. We could easily have seen GM and others putting more efficient and cleaner gasoline engines on the road today if the government would be more open about the science. Science and economics should come before the politics.

  • Scott Snerd

    The reason that this kind of technology is being used is because it is a dead end and the oil industry is allowing it to continue as a ruse to help shield REAL energy technology from coming to light that would REALLY hurt them.

  • landy fincannon

    They have the inside track, electric cars will become mandatory.

    • Billy Bob!

      Great point! The battery packs are very expensive to replace. Yes, they can be recycled but batteries are very dirty- heavy metals and many environmental concerns. Hydrogen is the best alternative- a little explosive but a lot of bang for the buck!

      • JustmJustm

        Sorry sir but because Hydrogen is the lightest element, one two it needs to be combined with LOTS of oxigen!
        And it does not ignite as easy as gasoline does!
        They allways use the Hindenburg accident but its skin was like a mach stick due to lack of thechnology!
        And more likely it was a small explosive what caused what happened!
        And tha gas bags where created from 150 000 cow stameck linings / each/!
        And i think there was 4-6 of those!
        i am not sure of those numbers…..

  • Billy Bob!

    I think this company is not worth a plug nickel! Why? Electric cars are not feasible – the batteries are still a problem.

    • Johnny G.

      We shall find out real soon. These guys are like sharks circling a feast!