Vale S.A
VALE
announced that it has completed the prefeasibility study for its proposed nickel sulfate project in Quebec, Canada. The project is expected to process 25,000 tons of contained nickel annually into nickel sulfate, the chemical compound utilized in the production of pre-cathode active materials for nickel-based lithium-ion batteries. This project development is in sync with the company’s ongoing endeavors to deliver low-carbon and high-purity nickel products for the promising electric vehicle industry.
The project would be the first-of-its-kind fully domestic nickel sulfate facility for the North American market, leveraging current and future production of low-carbon and high-grade nickel from Vale’s world-class Canadian operations. Vale’s Canadian operations produce some of the lowest-carbon nickel globally. Rounds from its Long Harbour refinery in Newfoundland & Labrador in 2020 had a verified carbon footprint of 4.4 tons CO2 equivalent per ton of nickel, while pellets and powder from the Copper Cliff Nickel Refinery in Ontario had a verified footprint of 7.3 tons equivalent. This includes Scope 1 and 2 emissions from mining, milling and refining as well as upstream Scope 3 emissions from inputs.
The prefeasibility study marks an important milestone for the nickel sulfate project, while the final investment decision and schedule for the project are subject to a range of factors, including downstream battery supply chain integration and requirements, as well as board and regulatory approvals.
In May, the iron miner had confirmed that it has signed a multi-year deal with leading electric vehicle manufacturer
Tesla
TSLA
to supply Class 1 nickel in the United States from its operations in Canada.
Amid the heightening climate-change concerns, the development of batteries used to power EVs is gaining utmost importance. This, in turn, has fueled the demand for metals utilized in the production of batteries. Riding on this, demand for nickel in batteries is estimated to surge more than 500% over the next decade. Meanwhile, lithium demand is forecast to improve 25-35% per annum over the next decade, with a significant supply-demand deficit expected from the second half of this decade.
Price Performance
Image Source: Zacks Investment Research
In the past year, shares of Vale have fallen 23.1%, compared with the
industry
’s decline of 19.5%.
Zacks Rank & Stocks to Consider
Vale currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the basic materials space are
Allegheny Technologies Inc.
ATI
and
Nutrien Ltd.
NTR
.
Allegheny has a projected earnings growth rate of 953.9% for the current year. The Zacks Consensus Estimate for ATI’s current-year earnings has been revised upward by 31.7% in the past 60 days.
Allegheny’s earnings beat the Zacks Consensus Estimate in each of the trailing four quarters, the average surprise being 128.9%. ATI has gained around 8% in a year. It currently sports a Zacks Rank #1 (Strong Buy). You can see
the complete list of today’s Zacks #1 Rank stocks here
.
Nutrien has a projected earnings growth rate of 163.6% for the current year. The Zacks Consensus Estimate for NTR’s current-year earnings has been revised 26.8% upward in the past 60 days.
Nutrien’s earnings beat the Zacks Consensus Estimate in three of the trailing four quarters while missing on one occasion, the average being 5.8%. NTR has appreciated 38% in a year. The company flaunts a Zacks Rank #1.
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