Nickel: EV Revolution's Hidden Challenge

Beneath the electric allure of a Tesla's sleek design and the subtle hum of a Chevy Bolt in motion lies a hidden challenge, one that crystallized for me as I delved into an S&P Global Report the other day. The United States, charging headlong into an electrified future, has reached a pivotal juncture that could hamper the entire Electric Vehicle (EV) revolution: the challenge of securing a consistent, domestic supply of nickel—a vital component in EV batteries—to satisfy the escalating demand.

This eye-opening insight has led me to speak with Gregory Beischer, the Chief Executive Officer and President of Alaska Energy Metals Corporation (AEMC). Prior to his role at AEMC, Gregory served over 15 years as CEO and President of Millrock Resources Inc. With his solid background in the mining industry, Gregory is at the helm of navigating the uncharted waters where demand for minerals like nickel is skyrocketing due to their critical role in EV batteries.

In this exclusive interview, we delve into the current state and future prospects of nickel – the “unsung hero” of the EV revolution – and explore the role of AEMC in ensuring America's nickel supply is secure, sustainable, and ethically sourced.

Join us as we unpack the complexities of a world where mining and technology converge, where environmental stewardship is as important as innovation, and where companies like AEMC are laying the groundwork for a future that is electric in more ways than one.

As the EV sector surges, how do you see the relationship between mining corporations and tech companies evolving?

Tech companies are already a huge part of the mining industry. Largely because tech is such a major contributor to reduced costs, efficiency, and responsible mining. Companies that have popped up over the last decade are the early adopters of just about any technology that has proven to make the industry better. Even legacy companies have adopted more innovative practices aided by tech.

As the EV sector surges, the relationship between the mining and technology sectors will only deepen. There’s no doubt a number of new best-in-class technologies are yet to be created.

All in all, critical minerals used in EV batteries will take the tech-mining relationship to the next level.

The EV revolution has already begun and over the next decades, it will require greater collaboration to ensure a stable supply chain of raw materials, supply chain sustainability and transparency, potential vertical integration, and investments in recycling and circular economy initiatives. Government regulations and incentives may also influence this relationship, while strategic alliances and investments could play a pivotal role in securing reliable access to essential, domestic minerals.

Can you elaborate on why nickel is so crucial for EV batteries and if there are any alternatives being researched?

Think about it this way. Nickel makes up 64 pounds of an EV battery. This makes nickel not only crucial to electric vehicles but the entire energy transition. We cannot decarbonize transportation without it. Nickel is going through the same paradigm shift that copper went through in the 1950s.

With the current level of EV demand, we can expect a ‘nickel supercycle’ to take place in the middle part of this decade.

The problem is, we are at risk of supply disruptions. Many of the mines and refining centers around the world are controlled by countries that are not always friendly to the US, and that could cut off supply at any time.

"China dominates the market for most battery raw materials, which presents geopolitical and environmental risks," said Graham Evans, S&P Global Research Director. “We don’t want to be too heavily reliant on any one country.”

Technology of batteries and EV power is evolving very rapidly. Research is accelerating and new ideas are coming forward all the time. Various combinations of metals can be used in batteries to produce power. But for now it appears that batteries that include a major nickel component are the reigning technology.

How do you see the nickel demand curve evolving over the next decade, especially as the transition to EVs gains momentum?

EV demand grew by 100% in 2021. This triggered nickel demand to grow at 15% per year. This is 3-5x what other base metals grew, and there was not a single analyst who was able to predict this type of growth. It’s no secret that the next big push for mass adoption of EVs is underway.

With this in mind, while nickel's growth rate has historically hovered around 4-5% annually, the rise in EV demand is set to amplify this figure. The one caveat is - according to the U.S. Department of Energy (DOE), "in the medium term between 2025 and 2035, nickel has been labeled critical and at a high supply risk.” This means we need to ramp up domestic supply considerably, and quickly.

Given the importance of nickel in the EV industry, how do you see the geopolitical landscape shifting around this resource, and what role does AEMC play in safeguarding America's nickel supply?

Not enough nickel is mined in the United States or other friendly countries, which will be needed to meet the projected demands of a decarbonizing nation. This is being recognized; however, long wait times for permits, in addition to litigation delays, remain an ongoing battle.

EV demand and the need for domestic nickel presents an opportunity for Alaska Energy Metals. The Nikolai project in Alaska offers the potential for discovery and delineation of a very large amount of nickel. On top of this, Alaska is a low political risk jurisdiction, and as EVs increasingly become the standard, our goal is to ensure that America is never left in the lurch due to sudden global shortages or erratic price fluctuations.

How do you perceive the current global nickel supply chain?

The nickel market is facing a massive supply glut this year as surging production continues to outpace global demand…because of Indonesian production. This is a huge issue because of how nickel is mined. Output is largely powered by coal.

Fortunately, the negative environmental impacts are being seen and are of major concern for global leaders. This, paired with political concerns are leading to a shift but it is not happening fast enough.

Why is it so crucial for America to have its own domestic sources of nickel? How does this fit into the global market dynamics?

Every country should strive for independence in its supply chains. When it comes to nickel, it's a matter of both security and future economic prosperity.

Often referred to as 'the metal of the future,' nickel plays a pivotal role in the global shift toward clean energy and electric mobility.

Therefore, we should not be dependent on other countries for the supply of this vital metal.

Are there any looming risks or challenges that the tech world might not be aware of when it comes to reliance on specific minerals or metals?

It’s certainly daunting to feel that a good portion of industries including the Tech world, do not realize the great risk the US faces from supply shortfalls and sudden disruptions.

The US Department of Defense is certainly aware of its vulnerabilities, and even still, the country does not have enough of the metals it needs for its production requirements.

If there is a sudden disruption, we are all highly vulnerable. Metal supply can be weaponized by adversaries that have worked over the past decades to secure supply lines while the US has abdicated them, and, in addition, driven away its domestic industry with mountains of red tape.

How would you respond to those who argue that, in the long run, the environmental cost of nickel mining might outweigh the benefits of EVs?

There is truth to that statement if we allow the mining of nickel and other critical and strategic metals in countries that do not share our ethics, environmental standards and human rights standards. A prime example of this is Indonesia, which uses coal to power the majority of its output. Yet still, it remains the largest producer of nickel in the world.

The modern North American mining industry is excellent in every respect. If we mine domestically to our standards and try our best to purchase metals from countries that share our values and try to change the values of others, we will definitely succeed in making the world a better place - environmentally and in all respects. The days of irresponsible resource extraction in North America are long gone.

In what ways is AEMC engaging with local communities in Alaska, ensuring that they benefit from your projects?

At this early stage of development, our geologists are the first ambassadors in our local community. In truth, there are no towns or villages immediately nearby. There are lodges and some scattered businesses and dwellings in the general area. \

We strive to utilize and support local businesses. For example, this year, our crew of 20 stayed at a local roadhouse, which seemed quite appreciative of the steady business. As the project grows, we look to engage Alaska businesses in the communities of Delta Junction and Fairbanks as the first priority.

Given the potential for significant profits in the nickel industry due to EV demand, how does AEMC ensure that ethical considerations aren't sidelined in the rush?

AEMC will likely not be the company that undertakes the construction of a mine. The most probable scenario is that a large, global company may become the ultimate project owner. In line with this vision, we would welcome strategic investment proposals from mining, processing and refining companies as well as battery or car manufacturers that wish to secure raw materials supplies. When the time comes to bring in a substantial partner, AEMC will be judicious and exercise careful discernment in who it chooses, to ensure our values are shared and well-aligned. Of note, our initial 2023 exploration program results, which were announced in October, show the potential to accelerate the publication of a maiden resource.

The United States, and specifically Alaska, has exceptionally stringent environmental, healthy, safety and labour regulations that demand the highest Environmental, Social and Corporate Governance standards. All in all, Alaska Energy Metals is a company founded by Alaskans. I first moved to Alaska in 1995 with Inco Ltd (now Vale), and have never left. Alaska Energy Metals is resolute in its commitment to safeguarding Alaska's pristine environment, without compromise.

Based on your four decades of experience, how do you envision the mining industry's role in supporting the tech world, especially beyond EVs?

Most people do not know that mining plays the most crucial role in our lives.

Critical minerals such as copper, lithium, nickel, cobalt and rare earth elements are essential components in many of today's rapidly growing clean energy technologies. Think wind turbines and electricity networks.

Nickel, in particular, is often referred to as a power metal because of its vital role in various rechargeable battery systems used in electronics, power tools, transport and emergency power supply.

Beyond this, nickel is commonly used in stainless steel appliances these days. Think about your ‘Smart Kitchen.’ Well, nickel is a core material for the stainless steel industry and accounts for over half of its supply. The aerospace industry also uses nickel, and the development of advanced aerospace technologies is just getting off the ground.

There is a saying, “If it can’t be grown – it must be mined”. From fertilizer to microchips to cosmetics, everything we use in our lives comes from mines. But by the same token, tech is every bit as crucial to society as the raw materials the mining industry provides. It is a synergistic relationship that is helping our society advance at an exponential rate.

Many startups are entering the battery and renewable energy sectors. Based on your journey with Millrock Resources and AEMC, what advice would you give them regarding sourcing materials and navigating the industry?

Societal shifts are occurring at an exponential rate. We're witnessing significant advances not just in refining metals, but also in how metals are used. The opportunities are boundless. But none of it is possible without the metal itself.

Over time, America has purposefully diminished its mining industry. It seems to be viewed as an archaic industry that has harmed the earth. There is no doubt the mining industry of the past has left environmental problems, but the mining industry of the future now sits at the forefront of environmental protection and sustainability.

My advice is to understand, embrace and be supportive of the need to source metals right here in North America first and to advocate and foster responsible development of minerals and metals in friendly countries.