NMC Pre-CAM Development in Australia: The Case for Nickel
NMC Pre-CAM development in Australia sits at the meeting point of mining wealth, clean-energy demand, and investor risk. Australia has abundant nickel yet processes little of it into battery-grade material, which raises a clear question for anyone assessing the sector: does building precursor cathode active material capacity locally deliver an acceptable return? This case study weighs the investment case for nickel in Australia from the perspective of an ETF research manager advising a high-net-worth client.
The Context: Rich Resources, Thin Processing
Australia has long supplied raw materials to global markets through a sophisticated mining sector, and in 2021 it accounted for around 79 percent of the world's hard-rock lithium mining. It is also rich in nickel, cobalt, and manganese, all critical to lithium-ion batteries. Yet its battery manufacturing footprint is small, producing roughly 1 gigawatt-hour a year, about 0.1 percent of the global total. The gap is starkest in nickel: Australia holds around 18 percent of the world's nickel resources but produced only about 6 percent of global nickel in 2021, with 98 percent of downstream operations located in Western Australia. That imbalance is the heart of the opportunity, since there is clear room to move downstream from mining into higher-value precursor material.
The Approach: Framing the Investor Questions
NMC Pre-CAM is the precursor cathode active material containing nickel, manganese, and cobalt that is further processed into the cathode used in NMC battery cells. An average 60 kilowatt-hour EV battery contains about 39 kilograms of nickel, which anchors demand for the metal. The study is built around questions a high-net-worth investor posed: at what nickel price would an Australian Pre-CAM plant deliver acceptable return on investment and over what timeframe, whether Australian product would meet United States and European ESG standards, what government incentives exist, and what other market challenges could affect profitability. The framing deliberately treats nickel as an investment thesis rather than a purely technical topic.
Findings: Price Volatility and Chemistry Risk
Nickel prices have swung sharply. On the London Metal Exchange, nickel rose from about 6,990 US dollars per tonne in early 2016 to over 20,000 dollars in 2022, peaking near 45,000 dollars in March 2022. A January 2024 survey of twenty forecasters expected an average a little over 19,000 dollars per tonne in 2024, with relatively stable prices through 2027. That volatility directly shapes the profitability question. A larger structural risk is chemistry competition: LFP batteries, largely made in China, use little or no nickel and are gaining share. Nickel-bearing chemistries such as NMC and NCA held about 54 percent of the global market in 2023, down from 61 percent in 2021, and LFP penetration is rising fast in China while remaining lower in Europe and the United States. Australia's strong ESG credentials in mining and refining were identified as a differentiator, since responsibly sourced material appeals to American and European buyers.
Implications for the Industry
The study shows that the case for Australian nickel is real but conditional. The country has the resources, the ESG standing, and government support, illustrated by the 2024 federal budget's backing for critical minerals and the designation of nickel as a critical mineral, which improves access to exploration and processing finance. Global EV makers are watching the market. Yet returns hinge on nickel price stability and on how quickly LFP erodes demand for nickel-rich chemistries. For an investor, the decision is a bet on both a commodity and a chemistry trend, where responsible sourcing and policy support can strengthen the case but cannot offset a structural shift away from nickel. The broader lesson is that moving downstream into precursor material can capture value, provided the underlying demand for the chemistry holds.
Key Takeaways
Australia holds around 18 percent of global nickel resources but produced only about 6 percent of nickel in 2021, leaving room to move downstream.
NMC Pre-CAM is the nickel-manganese-cobalt precursor processed into cathode material for NMC battery cells.
An average 60 kilowatt-hour EV battery contains roughly 39 kilograms of nickel, anchoring demand.
Nickel prices are volatile, ranging from about 6,990 US dollars per tonne in 2016 to a peak near 45,000 dollars in March 2022.
LFP batteries, largely made in China, use little nickel and are eroding NMC's market share, which fell from 61 to 54 percent between 2021 and 2023.
Australia's ESG credentials differentiate its product for United States and European buyers.
Government incentives and nickel's critical-mineral status improve financing, but returns depend on price stability and chemistry demand.
Disclaimer: This case study was developed and presented by BatteryMBA participants as part of the Case Study Track. Views, analysis and recommendations are the authors' own. BatteryMBA does not take responsibility for the accuracy or completeness of the content and it should not be relied upon as investment, engineering or legal advice.
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