Nickel is a critical raw material for lithium-ion batteries, particularly those with high-nickel cathodes such as NMC 811 and NCA, which demand high-purity nickel sulfate. The production of battery-grade nickel involves complex extraction and refining processes, with two primary ore types—sulfide and laterite—dominating global supply. Each ore type presents distinct challenges in processing, cost, and environmental impact. Geopolitical dependencies, particularly on Indonesia and Russia, further complicate the supply chain, while sustainability concerns drive innovations in extraction and refining methods.

Sulfide ores, found predominantly in Russia, Canada, and Australia, are traditionally favored for nickel production due to their higher nickel content and simpler processing. These ores are typically concentrated via flotation, followed by smelting and refining to produce Class I nickel, which includes nickel sulfate suitable for batteries. The pyrometallurgical route for sulfide ores is energy-intensive but yields high-purity nickel with relatively lower carbon emissions compared to laterite processing. However, sulfide ore reserves are depleting, and new discoveries are rare, pushing the industry toward laterite ores, which constitute about 70% of global nickel resources.

Laterite ores, abundant in tropical regions such as Indonesia, the Philippines, and New Caledonia, are more complex to process due to their lower nickel grades and high iron content. The two main processing routes for laterites are pyrometallurgical (ferronickel or nickel pig iron) and hydrometallurgical (high-pressure acid leaching, or HPAL). Ferronickel production involves smelting laterite ores to produce a nickel-iron alloy, which is unsuitable for batteries without further refining. Nickel pig iron, a lower-grade product, is primarily used in stainless steel. HPAL, on the other hand, is a hydrometallurgical process that dissolves nickel and cobalt from laterite ores using sulfuric acid under high pressure and temperature, yielding a mixed sulfide or hydroxide precipitate that can be refined into battery-grade nickel sulfate.

HPAL has gained attention as a critical technology for battery-grade nickel production from laterites, but it is capital-intensive and technically challenging. The process requires stringent control of temperature, pressure, and acid consumption, with operational risks including acid handling and waste management. HPAL plants also generate significant tailings, which must be carefully managed to prevent environmental contamination. Despite these challenges, Indonesia has emerged as a hub for HPAL projects, leveraging its vast laterite reserves and government policies promoting domestic processing. Major projects, such as those by Tsingshan and Huayou Cobalt, aim to supply nickel sulfate directly to the battery supply chain.

Refining nickel to battery-grade sulfate involves multiple purification steps to remove impurities such as iron, cobalt, and other trace metals. For sulfide-derived nickel, the process typically involves electrowinning or carbonyl refining to produce high-purity nickel metal, which is then dissolved in sulfuric acid to form nickel sulfate. For HPAL-derived nickel, the mixed sulfide or hydroxide precipitate undergoes solvent extraction to separate nickel from cobalt, followed by crystallization to produce nickel sulfate hexahydrate, the preferred form for battery cathodes. The final product must meet stringent specifications, with impurity levels in the parts-per-million range to ensure optimal battery performance.

Geopolitical dependencies heavily influence nickel supply chains. Indonesia, the world’s largest nickel producer, has implemented export bans on unprocessed ores to encourage domestic refining and HPAL investments. This policy has reshaped global trade flows, with China becoming a key player in Indonesian nickel processing. Russia, another major producer, faces supply chain uncertainties due to geopolitical tensions, affecting access to its high-grade sulfide ores. These dynamics create vulnerabilities for battery manufacturers, who must navigate trade restrictions, tariffs, and ESG concerns tied to sourcing.

Sustainability challenges in nickel production are significant, particularly for laterite ores. HPAL operations consume large amounts of energy and sulfuric acid, with carbon footprints higher than sulfide ore processing. Waste disposal is another critical issue, as laterite processing generates large volumes of tailings and acidic waste. Innovations such as dry-stack tailings and acid regeneration aim to mitigate these impacts, but scalability remains a challenge. Additionally, deforestation and land-use changes associated with laterite mining in biodiverse regions like Indonesia raise ecological and social concerns.

The push for sustainable nickel production has spurred interest in alternative technologies. Bioleaching, which uses microorganisms to extract nickel from low-grade ores, offers a lower-energy alternative but is not yet commercially viable for large-scale operations. Recycling nickel from spent batteries is another growing focus, though collection and processing infrastructure remain underdeveloped. Life cycle assessments highlight the need for integrated strategies combining ore processing efficiency, renewable energy use, and closed-loop recycling to reduce the environmental impact of nickel production.

In conclusion, nickel production for batteries is a complex and geopolitically sensitive process, with sulfide and laterite ores presenting distinct advantages and challenges. HPAL technology is pivotal for unlocking laterite resources but faces technical and environmental hurdles. Geopolitical dependencies on Indonesia and Russia introduce supply chain risks, while sustainability concerns drive innovation in extraction and refining methods. As demand for battery-grade nickel grows, the industry must balance economic, environmental, and ethical considerations to ensure a resilient and responsible supply chain.