Nickel Surplus and Indonesian Rules Cloud Outlook as Nico Advances Wingellina
Nico Resources has progressed its Wingellina nickel-cobalt project through updated resource estimates, detailed metallurgical testwork, and a strategic review of scandium extraction, even as nickel market conditions remain subdued.
- Updated 2024 Mineral Resource Estimate totals 187.3Mt at 0.91% Ni and 0.06% Co
- Infill drilling plans aim to upgrade resource classification from Indicated to Measured
- Metallurgical testwork highlights potential for improved nickel and cobalt recovery and acid consumption reduction
- Scandium content review initiated following Chinese export controls, exploring extraction opportunities
- Nickel market surplus expected through 2027 amid regulatory tightening in Indonesia
Wingellina Resource and Geometallurgical Advances
Nico Resources Limited has delivered a comprehensive quarterly update on its flagship Wingellina nickel-cobalt project in Western Australia. The company reported an updated Mineral Resource Estimate (MRE) for 2024, now standing at 187.3 million tonnes grading 0.91% nickel and 0.06% cobalt, equating to approximately 1.7 million tonnes of contained nickel. This update reflects detailed modelling of geological structures, lithology, and geochemistry, underpinning the development of a sophisticated geometallurgical model.
Progress on this model is staged in phases, with Phase 1 completed to define material types and ore classifications relevant to processing via a High-Pressure Acid Leach (HPAL) circuit. Phase 2, currently underway, involves planning an infill drilling program designed to increase data density, particularly focusing on high-grade zones, to support upgrading resource classifications from Indicated to Measured. This drilling will also provide critical density data to refine mine planning and scheduling.
Metallurgical Testwork and Ore Preparation Insights
Extensive metallurgical testwork conducted at ALS Laboratories has yielded promising results. Scrubbing tests revealed the potential to separate nickel-rich fine fractions from coarser, acid-consuming minerals, which could significantly reduce reagent consumption in the HPAL process. Gravity separation tests further demonstrated the ability to concentrate cobalt and manganese-rich minerals, enhancing metal recovery and potentially lowering operating costs.
The company is evaluating ore preparation flowsheets incorporating trommels, attritioning, and hydrocyclones to optimize feed quality into the autoclave. These advances aim to maximize nickel and cobalt grades while minimizing deleterious elements, a critical factor in maintaining low-cost, high-margin operations.
Scandium Potential Amid Market Shifts
In response to recent Chinese export controls on scandium, Nico Resources has reviewed the scandium content within the Wingellina ore, which averages around 55 ppm; significantly higher than comparable operations like the Taganito HPAL plant in the Philippines. Scandium is increasingly recognized as a critical mineral with growing demand in aerospace and clean energy technologies. Preliminary testwork indicates scandium is readily leachable during processing, and the company is exploring extraction methods using specialized resins to add value to the project.
Market Context and Regulatory Environment
The nickel market remains challenging, with prices trading within a narrow range and a global surplus expected to persist until at least 2027. Indonesian nickel production continues to expand, outpacing demand growth and contributing to market imbalances. However, recent regulatory tightening by the Indonesian government; including increased royalties and stricter permit enforcement; could constrain future supply and potentially accelerate price recovery.
Nico Resources is navigating these conditions prudently, reducing discretionary expenditure while advancing key technical work and stakeholder engagement. The Wingellina project’s designation as a Major Project by the Australian Federal Government provides access to streamlined regulatory pathways, underscoring its strategic importance in the critical minerals sector.
Financial and Corporate Update
At quarter-end, Nico Resources held $2.93 million in cash and working capital, with exploration and evaluation expenditure of $455,397 during the period. The company continues to maintain strong governance standards and proactive engagement with Traditional Owners, local communities, and government agencies, reflecting its commitment to sustainable development and social responsibility.
Bottom Line?
As Nico Resources advances its technical and environmental groundwork, the next drilling results and scandium extraction progress will be pivotal in shaping Wingellina’s path amid a complex nickel market.
Questions in the middle?
- How will the infill drilling results impact the resource classification and project valuation?
- What are the economic prospects and timelines for commercial scandium extraction at Wingellina?
- How might evolving Indonesian regulations influence nickel supply and pricing dynamics affecting Nico’s project?