South Africa’s team of local battery material champions are planning first-mover advances in new geographies.
Thakadu Battery Materials, which is producing high-quality battery-grade high-purity nickel sulphate for export, has a pipeline of new projects in place that will involve the use of the locally developed intellectual property (IP) and proven process technology to fast-track other assets under development in Southern Africa and North America.
In what is a huge story of world-class local innovation, Thakadu, operating as a completely independent startup business, is turning platinum group metals- (PGMs-) linked nickel solution into premium-priced and sought-after battery material that is helping to make the world a greener place.
Thakadu’s newly commissioned $20-million nickel sulphate refinery in North West province receives the nickel solution from the base metals refinery (BMR) of PGMs mining company Sibanye-Stillwater and then removes the solution’s impurities down to parts-per-million levels through advanced chemistry. The cathode battery material it produces is already fetching premium prices in major global export markets.
“We created our own proprietary process at Mintek working with a team of scientists, ours and theirs. We’re now ranking our pipeline of projects and assessing where we’re going to go. By the end of the first half of this year, we’ll have a very clear direction,” Soweto-born Thakadu CEO Ruli Diseko, 37, said in an interview.
“We took a risk and we now have first-mover advantage that’s demonstrable in our IP. We intend to consolidate and leverage our first-mover advantage into new opportunities.
“It’s value-adding because it allows us to fast-track companies, which are trying to do what we have succeeded in doing, up the value curve,” said Diseko, whose Thakadu identified an opportunity at the bottom of the cycle, took a huge risk, borrowed money and succeeded in building its plant while facing considerable headwinds, the Covid-19 pandemic notwithstanding.
“We took it from a concept study. We did the prefeas and I would literally fill all of two pages of the Sunday Times to thank everybody who has been a part of this project, and if you had to read the names in alphabetical order, you’d realise that the people who helped to build this project are young, old, black, white, from Joburg, from Gauteng, from North West. You don’t build a refinery without enormous help from many people, from many places,” said Diseko.
“How many hydrometallurgy plants exist in the world? How many exist in South Africa? When last was a hydrometallurgical plant built? How many refineries have been built in the last 80 years and how many refineries have ever been built like this? The only people who come at me with these questions are the guys from abroad. The reality is that we resourced it, manned it and borrowed money that we still have to pay back,” he said.
“We’re very pleased that our refinery is up and running. We’ve got an excellent team. We’ve basically got what I would call the champions league of guys who come from all the big BMRs in the country. We recruited a nice collection of young talented engineers, artisans and millwrights from Anglo American Platinum BMR, Impala BMR, from what is now Sibanye-Stillwater but which was historically Lonmin BMR.
“These guys are amazing to me because, like me, they could still be sitting there in top jobs at Anglo, Impala and Sibanye, as they had been doing, but they are so aligned with the mission of creating value at source for a future industry that they actually took the risk, like I did, and quit their jobs,” said Diseko, who also quit his exco level job and whose colleagues at the former Lonmin included Natascha Viljoen, now CEO of Anglo American Platinum, and Mark Munroe, the CEO of Impala Platinum.
“We’ve got a very good team of professionals. We’ve come together to work on this mission and they’ve actually brought this refinery to production and I’m very, very, very happy about that because they’re aligned with the mission that I’m talking about, which is basically to have a responsible source of battery materials that supplies the world.
“We’re taking a waste stream and we’re applying process technology to add value and realise value from what would have been disposed of at a much lower value. This is really a very straight forward example of economic value add and we’ve created jobs through a new business where there was none, and the industrial asset we’ve created can go on for many more decades.
“We have a platform now, with an asset that produces high-grade battery material into new-era global demand that is aimed at greening the planet. It’s timing is absolutely right because you look at start-ups of our size, if you look at start-ups that are listed on AIM, ASX or TSX, their market caps are anything from $80-million to $150-million but they don’t even have feasibility studies done.
“We did our feasibility study at the bottom of the cycle. We’re in production. We’ve got an installed capacity of 30 000 t of nickel sulphate. We have to ramp that up. We’ve said that this year we’re going to do about 16 000 t of nickel sulphate. From 2022 onwards, our targeted average steady state is about 25 000 t a year. You know, you’ll never quite run the plant at 100% of capacity. So, it’ll be 25 000 t a year on average for the next decade, that’s what our aim is.
“I think it’s pretty significant, and people missed this part: We’re not a battery metals miner, we’re not a miner. We’re an innovative start-up that’s invested in its own proprietary process technology that produces high-purity battery chemicals. That’s very different from drilling and blasting and hauling dust, and getting it into a concentrator and then getting it to a smelter and then getting it refined.
“People missed the point that we’re producing from a by-product, which is very innovative, and there are very few opportunities to do that in the world. The overwhelming conversation is around primary mining.
“If you go back to sustainability and responsible sourcing, you would see that if there were a cost curve, we would be right at the bottom of that cost curve, and it’s also quite relevant from a cost curve point of view because you must understand that if you’re going to go and buy a nickel mine in Brazil, you have to permit it, you have to clear the environmentals – again mining, drill blast, haul, and nobody ever talks about the processing aspect of it, and the cost of that, and the skills set required for that.
“If you compare us with everyone else in the world that is said to be doing, or going to do what we’re already doing, we’re advantaged because we’ve been creative, innovative and we’ve used technology to put us in a position where we can focus on by-product, and to me that’s a more ethical and responsible way of sourcing and producing. We’re not hurting the environment, we’re actually using something that’s already there,” Diseko said.
The nickel sulphate solution piped for processing from the BMR was formerly crystalised and sold as lower intermediate.
“From an economic point of view, we add 50% to 60% value. We’re not in the commodities space, we’re in the chemicals space, so it’s all about value in use, again a distinction between us and others,” he said, emphasising the importance of spending long sessions with the using chemicals companies to understand their cathode transactions with original equipment manufacturers (OEMs), and the battery requirements for those OEM companies.
“You have to understand how they’ve tuned their supply chain and processing licence to produce precursor materials, that turn into cathode materials. So, what I’m saying is that, as a producer of high-quality battery-grade high-purity nickel, it’s a busines-to-business price. They look at your recipe and look at your value in use, and they give you a premium over the London Metal Exchange price of nickel, and we’re starting to sell our product now to customers in China, Japan, Korea, Europe and Latin America,” said Diseko, who also talks of some huge global companies being without asset infrastructure to process in the way that Thakadu can.
Thakadu’s ingenuity is that it has managed to get advantaged economics out of processing at source, within a long-standing PGMs processing environment.
“We built our infrastructure to tap into the BMR’s line of nickel solution, which goes into our nickel sulphate refinery, which is where we do very advanced chemistry to get the impurities down to parts per million. We’ve done it, and it’s a huge story of world-class innovation. You could get nickel sulphate from laterite sulphides but we’re doing it from PGM pipelines, and I don’t know anyone else in the world who is doing that,” he said.
When the cathode-focused product gets to export destinations, development into precursor materials requires even more advanced chemistry. Depending on the chemistry, is could become, for example, nickel-cobalt-aluminium oxide, or nickel-cobalt-manganese, at the different combinations used in different batteries.
“Our goal is to turn the one-asset platform we have into a multi-asset platform, and it will be multi-metal so that we can offer companies their nickel, cobalt and manganese. That’s the direction we’re going in, but at the high-purity end.
“Even in our plant we produce a cobalt hydroxide, but the difference between an hydroxide and a high-purity battery chemical is like the distance from there to China. It’s a big thing. So, you have to take an hydroxide, turn it into a carbonate, and then you go up until you get the battery-grade material.
“That’s why, when people talk about battery metals, it’s normally about mines. But when somebody starts talking about battery materials, it’s people who are close to the downstream real value-addition, where the actual innovation, the actual technology happens, and that’s where we feature,” Diseko explained.
The $20-million invested in the plant came from a 60%/40% split between debt and equity.
“So, I got 40% of that $20million from actual private investors. I’ve got proper skin in the game. We drew investor funding and debt funding, we’ve built the plant, we’re in production now, and we think we’re well positioned to ride this upswing in battery metals demand,” said Diseko, whose started out in 2005 as an economic analyst at South Africa’s Department of Trade and Industry, after graduating with a BCom from the University of Cape Town (UCT), a postgraduate diploma in business administration from the Gordon Institute of Business Science, and a Master of Business Administration from UCT.
As reported earlier by Mining Weekly, the indications are that the plant will generate a yearly pre-tax internal rate of return of 47%-plus over its operating life.
Nickel demand from the automotive sector is growing rapidly, with electric mobility expected to represent the single-largest growth sector for nickel demand over the next 20 years.
According to commodity research firm Roskill, nickel sulphate consumption has grown at 20% a year since 2014 and that has primarily been driven by the rapidly growing electric vehicle battery sector.
The research firm expects to see demand grow from between 90 000 t and 100 000 t of contained nickel in 2020 to 2.6-million tonnes by 2040.