What are ASX nickel stocks?
ASX nickel stocks are mining companies involved in the production of nickel. They can be mining giants like BHP Group Ltd (ASX: BHP), which already owns and operates multiple nickel mines around the world, or small-cap companies like Poseidon Nickel (ASX: POS), which have nickel projects still in the development stage.
Nickel is one of the planet's most abundant and commonly used metals. Historically, we have used nickel in physical currencies – all Australian coins (including our 'gold' ones) are still made of nickel alloys.
Nowadays, because it is strong, durable, and highly resistant to corrosion, most of the world's nickel (about 70%) is used to produce stainless steel.
But nickel's use in emerging technologies – particularly battery technology – has some investors very excited about its future prospects.
Why invest in ASX nickel shares?
Like lithium and graphite, nickel is one of the most critical raw materials used to build lithium-ion batteries that power electric vehicles (EVs). Nickel, cobalt, and manganese are used as cathodes in batteries and help increase a battery's useful life and energy density.
As the world transitions away from fossil fuels (like oil) and towards more sustainable and environmentally friendly energy sources, the mass adoption of EVs is expected to accelerate. This will increase demand for the raw materials used to build lithium-ion batteries.
But it's not just EVs that use lithium-ion batteries. Popular technological devices like smartphones, tablets, and laptops also use lithium batteries, meaning they all need nickel.
These trends could see demand for nickel surge over the coming years. If demand for the metal outstrips supply, this should push the price higher – potentially resulting in greater profits for nickel producers.
Top nickel shares on the ASX
Some of the largest mining companies on the ASX are major nickel producers, including BHP, RIO Tinto Ltd (ASX: RIO) and South32 (ASX: S32). Indonesia is by far the largest nickel producer on the planet, although Australia ranks a commendable fifth1.
Big miners like BHP, RIO and South32 would clog up the top 3 list of just about any ASX mineral producers, so we won't include them all below (just BHP, considering it's the largest miner — and company — currently trading on the ASX).
Depending on your risk appetite and investing objectives, many small and mid-tier nickel companies in the ASX are worth looking at outside the big miners. We've included a couple below ranked by market capitalisation from highest to lowest.
| Company | Description |
| BHP Group Ltd (ASX: BHP) | Diversified global mining giant involved in nickel production |
| IGO Limited (ASX: IGO) | Mid-tier mining and exploration company focussed on supplying the materials critical to the clean energy transition |
| Nickel Industries Ltd (ASX: NIC) | Vertically integrated nickel stock with multiple operations in Indonesia |
BHP
BHP will top almost any list of ASX mining and metals companies. It is the largest company listed on the ASX by market capitalisation, and its diversified mining operations span the entire globe.
BHP's nickel mines are in the Northern Goldfields, near Kalgoorlie in Western Australia. The nickel sulphide ore that BHP produces is smelted and refined in WA before being transported to the Port of Fremantle for export to overseas markets. BHP sells more than 85% of its nickel to the EV battery industry.
BHP recently added to its nickel portfolio when it acquired mid-tier mining company OZ Minerals for $9.6 billion in May 2023. OZ Minerals owned the nickel project in West Musgrave, WA, which is highly prospective for nickel and copper. Once operational, it is expected to have a production life of about 26 years.
IGO
IGO is a good choice for investors seeking exposure to the metals and mining sector who also want to support the transition to green energy.
This mining and exploration company focuses on exploring, developing and operating mining projects that produce the materials used in clean energy systems. It owns and operates a diversified portfolio of mining projects, including a lithium joint venture.
The company boosted its nickel assets by acquiring small-cap nickel miner Western Areas for $1.3 billion in 2022. Western Areas owned two nickel projects in Western Australia, including the Forrestania operation, which the company claims is one of the highest-grade nickel mines in the world.
Nickel Industries
A vertically integrated nickel company, Nickel Industries has interests in multiple nickel mines in Indonesia, including the Hengjaya mine. Over the past decade, many new nickel operations have been launched in Indonesia, which is by far the world's largest nickel producer.
Nickel Industries produces low-cost nickel pig iron, used to make stainless steel. It's essential to remember this fact if you're considering investing in Nickel Industries, as it means the company doesn't tap into the EV transition.
Nickel Industries frequently collaborates with leading Chinese nickel and stainless steel producer Tsingshan Holding Group, which is particularly active in Indonesia.
Pros and cons of investing in ASX nickel shares
Some of the benefits include:
Nickel is one of the most widely used industrial metals: Nickel possesses many properties that make it particularly useful in industry and manufacturing. Notably, its resistance to corrosion means it is a crucial component in stainless steel production. Historically, this constant level of demand has kept nickel prices relatively stable over time, reducing its risk.
The global transition to renewables could spur increased demand: The main reason to invest in nickel is to tap into the renewables theme. As the globe transitions away from fossil fuels, demand for EVs and other more environmentally friendly technologies will increase. This should drive up demand for nickel because of its use in rechargeable lithium-ion batteries.
And the cons:
The market has been turbulent recently: Despite its long and stable history, even nickel isn't immune to geopolitics. Massive price fluctuations in 2022 and 2023 have shown that the nickel market can still be risky. Global conflicts and trade embargoes can upset its price. Always consider the current environment before deciding to invest.
It is one of the most abundant metals on the planet: Although demand for nickel may increase in coming years, its ample supply means that prices may not increase as much as investors hope. Bigger miners can ramp up production quickly to meet rising demand, which could keep prices low and even force out junior players.
How are market conditions changing?
Although it's usually a stable and staid commodity market, nickel has been grabbing headlines in recent years.
Nickel prices skyrocketed early in 2022, shortly after the onset of the Russia-Ukraine conflict. Russia ranks number three on the list of the world's largest exporters of nickel, behind only Indonesia and the Philippines. Uncertainties around the impacts of the war and the effects of Western-imposed sanctions sent the global nickel market into chaos.
A short squeeze on the commodity finally forced the London Metals Exchange to halt nickel trading for 12 days in March 2022 after prices surged to more than US$100,000 a tonne. For some context, the nickel price had barely edged above US$20,000 a tonne at any time over the previous decade.
Since then, the nickel price has decreased, particularly throughout 2023, and is now close to US$15,000 a tonne. While that might be a significant fall from the heady days of March 2022, it is still materially above pre-COVID prices. At a time when you would expect rising interest rates, sticky inflation, and geopolitical tensions to be dampening demand, the nickel market has remained surprisingly resilient.
Are ASX nickel shares right for you?
Investing in nickel is one of many ways to tap into the global renewables transition. Its use in the lithium-ion batteries required to charge EVs and other environmentally friendly technologies could see demand for the metal quickly outstrip supply in coming years, potentially pushing up the price of ASX nickel stocks.
However, recent history has shown that even something as dull as nickel isn't immune to price volatility. This shows how important it is to always carefully consider your financial situation and risk appetite before deciding to make any investment – and investing in ASX nickel stocks is no different.
Frequently Asked Questions
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There are many benefits to investing in nickel. After all, it is one of the world's most widely used industrial metals. Historically, nickel was always in demand, mainly due to its use as a currency, especially in the United States. More recently, nickel's strength, durability and anti-corrosion properties made it an ideal addition to stainless steel.
However, demand from the green energy sector is perhaps the most exciting reason to invest in nickel. Nickel is a critical ingredient in the rechargeable lithium-ion batteries used in electric vehicles (EVs). As the world transitions from fossil fuels and embraces green energy, nickel demand could outstrip global supply, potentially pushing up prices.
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Despite nickel's long-term appeal, prices have been surprisingly volatile recently. Persistent high inflation and rising interest rates have dampened demand in many regions of the globe. The ongoing war between Russia and Ukraine has also contributed to recent volatility in the nickel price. Russia ranks third among the world's largest nickel producers, and the uncertain impacts of the war and Western-imposed sanctions sent many global markets into chaos.
All this is to say that while there are many reasons to recommend nickel as an investment, it's not without risks. An uncertain economic outlook makes it difficult to predict where the price of nickel will go from here, so make sure you are comfortable with these risks before investing.
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Plenty of great options are available to you on the ASX if you want to invest in nickel. A global mining giant like BHP Group Ltd (ASX: BHP) might suit investors looking for broad exposure to the commodities markets. BHP has an extensive portfolio of mining assets, producing iron ore, copper, coal, and nickel.
Mid-tier mining companies like IGO Limited (ASX: IGO) might suit investors who are more interested in the global green energy transition. IGO focuses on producing the mineral raw materials necessary to support clean energy, including cobalt, lithium, copper, and of course, nickel. And, if you're an investor who simply wants exposure to the nickel market alone, a small mining company like Nickel Industries Ltd (ASX: NIC) might provide what you're looking for. This pure-play, vertically integrated nickel company produces low-cost nickel pig iron.
