Wyloo is planning to sell its nickel products through Metalshub in a bid to fetch a green premium once its restarts its shuttered Kambalda operation.
Wyloo Metals is planning to sell its nickel products through Metalshub in a bid to fetch a green premium once its restarts Kambalda, in what appears to be a move away from the London Metals Exchange.
Andrew and Nicola Forrest’s Wyloo inked a memorandum of understanding with Metalshub to partner on developing a price index for low-carbon nickel concentrate and sulphate in future sales contracts on the platform.
On Metalshub, any class 1 nickel on the platform can be listed with specific environmental, social, and governance (ESG) credentials, including its carbon footprint, aimed at marketing the products to buyers with procurement requirements.
Earlier this year the Australian government and flailing nickel miners were calling on the LME to distinguish between ‘clean’ and ‘dirty’ products to aid the battered price of Australian nickel.
But the exchange made its position clear that it didn’t intend to launch a separate ‘green’ nickel contract and said low-carbon nickel could already be traded on Metalshub, which it collaborates with.
The exchange also raised concerns over defining 'green' nickel, and whether the market was large enough to support trading in a dedicated green futures contract, which it said could fragment liquidity.
It came after nickel concentrate pricing on the LME was severely impacted by the flood of Indonesian supply, which led several higher-cost WA producers to mothball operations, including Wyloo.
Wyloo chief executive Luca Giacovazzi previously called for structural change in nickel pricing that distinguished between products based on their ESG credentials.
At the time, he said the LME was awash with pollutive nickel which was squeezing out clean nickel from Australian producers.
Commenting on the collaboration today, Mr Giacovazzi said it would set a new global standard for sustainably produced nickel products and enable greater transparency of low carbon nickel pricing.
“The Metalshub platform will enable nickel producers to provide provenance, carbon footprint and ESG information to customers, in an auditable form, leading to qualification under key market regulations such as the USA’s Inflation Reduction Act or the European Union’s Carbon Border Adjustment Mechanism and Battery Regulation,” he said.
“If we want car manufacturers to effectively manage their scope three emissions, and to empower consumers to choose electric vehicles that are truly good for the environment, the industry must adopt transparent emission reporting across the supply chain.”
Wyloo placed its Kambalda nickel mine onto care and maintenance at the end of May, a move which impacted 44 direct employees and 220 contractors.
Shortly after BHP Nickel West announced it would shelve part of its processing operation in Kambalda ahead of mothballing its entire nickel division amid ongoing depressed prices.
The nickel price crunch also led to First Quantum Minerals, Panoramic Resources, IGO and Arcadium Lithium to curtailing battery metals operations in WA.
Metalshub managing director Sebastian Kreft said the transparency would give nickel producers an opportunity to market their products with a premium.
“[But] nickel mining and processing presents significant ESG concerns relating to greenhouse gas emissions, air, soil and water pollution, the destruction of ecosystems, indigenous rights, energy use and working conditions,” he said.
“Our platform will enable mining companies and manufacturers buying metals to demonstrate that they are addressing these concerns and meeting the needs of the green energy transition in an ethical and sustainable way.
“It is also another milestone on our joint journey together with the LME to provide producers and consumers access to our software platform to discover “green” nickel premiums.”
Metalshub and LME have an existing partnership to "improve pricing transparency and support sustainability for base metals", according to the exchange.
LME classifies low-carbon nickel as producing 20 tonnes of carbon dioxide or less per tonne of the battery metal.
