The conflict between Ukraine and Russia has impacted the prices of raw materials such as corn, wheat and oil, among others, in international markets. But in the midst of this scenario, it has favored the price of nickel, which translates into profits for producing countries such as the Dominican Republic.
More than a year ago, the price of nickel was around four dollars per pound and even before the war it was between 10 and 11.50 dollars.
According to official data, Russia supplies about 10% of the world’s nickel. This mineral is used to manufacture batteries for electric vehicles, among others. Yesterday, the price of nickel closed at US$ 37,234 per ton.
For the director of Mining, Rolando Muñoz, the exponential increase of nickel is a product of the fact that it is one of the transition minerals, this means that they are the minerals used for the construction, in the age of technology, of many electronic equipment, but especially of the batteries of electric vehicles.
“Another important factor that has created another exponential growth in prices has been the Ukraine-Russia war,” he noted. “Russia is a major nickel producer and a major nickel exporter to the whole world. Similarly, Ukraine uses and produces a lot of nickel and, as it stopped production because of the war process they are going through, and Russia banned exports as a strategy, obviously, nickel prices skyrocketed.”
How does the behavior of nickel impact the Dominican Republic?
Muñoz explained to Diario Libre that the behavior registered by the price of nickel due to the war conflict will positively impact the Dominican Republic because the lines of operations of the company Falconbridge Dominicana (Falcondo) in the provinces Monseñor Nouel and La Vega are full-time producing nickel.
“It benefits us because in principle we will have a considerable increase of 20 to 25 percent in the workforce used by the mining company. That is the first step. The second important step is that we are going to go from exporting 384 million dollars, which was in 2021, and this year we plan to export more than 500 million dollars. That is going to help the trade balance of the Dominican Republic.”
He also said that the other impact that the country will have is through the contract with Falconbridge that, the greater the production, the greater the sales, the greater the profit and “there will be greater dividends for the treasury in the Dominican Republic”.
He highlighted that Falconbridge is one of the “most efficient” factories in the region. “We have periodic meetings with the executives of Falconbridge and we are demanding that they export a little more”, he said.
When interviewed by Diario Libre, Muñoz added that there is another important value that is implicit in this panorama and that is that in mining not all deposits are homogeneous.
“Easily you go to a mountain and side A, B or C has 2.5 percent nickel and side B may have 1.4. Then, in that 1.4, if you take it to the beneficiation plant, it does not give you profitability with depressed prices, but when prices increase, those deposits, which are low grade, become real reserves and can be incorporated into the production process,” he analyzed.
He explained that the aforementioned gives, first, more economic benefits, but also extends the life of the mine.
He specified that, if the situation between Russia and Ukraine continues, nickel will continue to increase in price due to the great demand, as it is a transition mineral. It is understood that it is a mineral that will be in demand to build electric vehicle fields.
“Nickel, lithium and copper are the main elements for the construction of batteries and also technology (cell phones, computers, tablets…). All these elements are vital and demanding,” he said.