MELBOURNE (Reuters) - BHP Group BHP.AX will begin production of nickel sulphate by the middle of next year as it focuses on improving the green credentials of operations that will supply battery materials to the automotive industry, an executive said on Tuesday.
BHP said in August last year that it planned to start nickel sulphate production at its Kwinana plant, south of Perth, by the second quarter of 2020, before development was delayed due to complex engineering required to make the high purity product.
“We expect to have first crystals in the second half of this financial year,” asset president Eddie Haegel told the Diggers and Dealers mining conference in Kalgoorlie, Western Australia, according to a copy of his speech.
Nickel makes batteries energy dense so cars can run further on a single charge.
As buyers seek low carbon choices, BHP is focusing on improving the environmental footprint of the operations, Haegel said.
“Our customers and future customers are increasing their demand for clean nickel products and a clean supply chain, so having the best assets also means addressing our Scope 1 and 2 emissions,” Haegel said, referring to direct and indirect carbon emissions such as those that come from power use.
Tesla Inc TSLA.O chief Elon Musk urged miners to produce more nickel in July, warning the cost of batteries remained a big hurdle to the company's growth.
“Elon Musk’s recent call to nickel producers is a welcome reminder that there is huge demand coming for battery grade products,” Haegel said.
BHP produces sulphate from higher-grade nickel sulphide deposits, which require less power to process than from laterite ore alternatives and are common in Indonesia.
BHP is securing renewable power contracts, installing 18 megawatts of solar and a new steam generator at its smelter. It also plans to upgrade the acid plant at its Kalgoorlie Nickel Smelter to cut sulphur dioxide emissions by 2024, Haegel said.
The division is still a tiny part of BHP’s overall business, recording a $37 million loss in underlying earnings last year compared with an $11.1 billion profit for iron ore.
Reporting by Melanie Burton; Editing by Robert Birsel
Our Standards: The Thomson Reuters Trust Principles.