Quote from the article of International Nickel Association:

This article is the second in a series, "From Nickel Mines to Electric Vehicles," focusing on the "strategic" and "critical" assessment of global nickel resources and its impact on resource management policies. (Image courtesy of ELEMENTS on critical mineral assessments).

 Nickel enables the electrification of cars, thereby mitigating climate change.

The impact of global warming is felt by everyone, such as frequent extreme weather events. People cannot wait until a disaster strikes before taking action. In 1992, forward-looking climate change researchers and policy advocates, with the support of most UN member states, pushed for the adoption of the United Nations Framework Convention on Climate Change (UNFCCC). Since 1995, the Conference of the Parties (COP) has been held annually by countries that are parties to the convention, to assess progress and continually adjust responses to climate change.

In 2015, at the COP21 conference held in Paris, France, the contracting parties established specific goals to mitigate global warming: by the end of the 21st century, they aimed to keep the rise in global average temperature since the pre-industrial era within 2 degrees Celsius, and strive to limit the temperature increase to 1.5 degrees Celsius. In 2021, at the COP26 conference held in Glasgow, United Kingdom, the contracting parties identified the transformation to renewable energy and the popularization of electric vehicles as two important approaches to address climate change.

Compared to traditional cars, electric vehicles require more new energy metals such as nickel, cobalt, and lithium. This has triggered stakeholders' interest in the socio-economic importance of metals like nickel. The significance of nickel resources can be assessed from two perspectives: "strategic" and "critical.

The difference and connection between "strategic raw materials" and "key raw materials

The so-called "strategic materials" refer to those raw materials that are of great importance but currently have no supply risks.

In assessing and identifying "critical raw materials," most countries rely on two core factors: supply risk and economic importance. A material is considered critical when it plays a vital role in significant industrial value chains, but its supply may be subject to disruption. These supply risks typically stem from concentrated production capacity in few countries or companies, volatile trade relationships, inadequate recycling infrastructure, or the absence of viable alternatives.

The connection or commonality between "strategic materials" and "critical materials" lies in their essential role for critical industries, economic stability, national security, and technological innovation. Without reliable access, sectors such as defense, energy, telecommunications, and electronics could face significant disruptions.

The "strategic" and "critical" nature of a certain type of raw material is dynamically changing with objective circumstances. Often, people fail to recognize the importance of these materials until a shortage occurs, which can be triggered by various reasons such as supply-demand imbalance, geopolitical factors, inadequate recycling, etc. In the past few decades, the scarcity of iron ore, coking coal, rare earths, magnesite, and silicon has disrupted industrial value chains and impacted the global economy. However, with technological innovation and the discovery of new mineral deposits, what was once considered a "critical raw material" used to manipulate the value chain may eventually be replaced and return to its ordinary status.

The "strategic" and "critical" nature of nickel resources

Nickel is a raw material that has attracted global attention from governments. Since 2000, many countries and regions have launched "criticality assessments" of raw materials including nickel, aiming to anticipate supply risks and ensure the continuous flow of essential raw materials. Today, more than 25 countries worldwide are conducting such evaluations, identifying raw materials crucial to their economies and industries and taking measures to mitigate supply risks.

Nickel is widely considered a "critical" raw material in many countries and regions around the world, with the United States, Canada, China, and Japan being some of the most prominent examples. But why is that? Nickel's critical status stems from its vital role in the energy transition and digitalization, particularly as an essential component in the batteries of electric vehicles (EVs) and low-carbon power generation technologies. As the demand for these technologies grows, so does nickel's importance. In the European Union, nickel is recognized as both "strategic" and "critical" raw material. This not only reflects its current economic significance but also suggests the potential pivotal role it may play in the future.

Nickel, with its unique properties such as corrosion resistance and high-temperature strength, plays an irreplaceable role in modern society. Its applications across various fields, from infrastructure to cutting-edge technology, reinforce its pivotal position within the global economy. Consequently, nickel is not only a strategic raw material but also a critical one, exerting crucial influence on human society, both now and in the future.

The policy impact of the "strategic" and "critical" status of nickel resources

Can the nickel industry benefit from its products being considered "critical" or "strategic" raw materials? The growing demand for nickel resources is prompting countries to take a series of measures to ensure supply security. Governments are starting to refine and simplify the process for issuing permits, encouraging domestic production, investing in recycling technologies, and ensuring access to nickel-rich regions through diplomatic means. For the nickel industry, these policy actions can translate into support for mining, processing, and recycling projects, as well as increased investment in research and development.