West Asia War and Nickel

India’s electric vehicle (EV) battery, energy storage, and stainless-steel industries are facing concerns over rising nickel prices and possible supply disruptions due to the ongoing conflict in West Asia. The uncertainty stems from shortages in the supply of phosphorus and sulphur—key inputs used in nickel refining plants in Indonesia—following disruptions caused by the conflict and restrictions around the Strait of Hormuz.

Nickel is a critical mineral for India’s clean energy transition and emerging green technologies. It is widely used in EV batteries, energy storage systems, and stainless-steel manufacturing.

Why Nickel Matters

• Nickel contributes nearly 22% of the total cost of an electric vehicle battery.
• Ferronickel and Nickel Pig Iron (NPI), both iron-nickel alloys, are essential raw materials for stainless steel production.
• India imports nearly 80% of its ferronickel requirement from Indonesia.

Indonesia’s Importance

• Indonesia is the world’s largest producer of nickel.
• It possesses around 21 million tonnes (Mt) of nickel reserves, accounting for nearly 20.6% of global reserves.

About Nickel

• Nickel is a silvery-white metal and the fifth most abundant element in the Earth’s crust.
• It does not occur in a pure native state in nature.
• Pure nickel is extracted through:
  • Reduction of nickel oxides, or
  • The Mond Process.

India’s Nickel Dependence

India does not produce nickel from primary sources on a significant scale. As a result, the country’s entire domestic demand is largely met through imports, making sectors dependent on nickel vulnerable to global geopolitical disruptions and supply-chain uncertainties.

Sources: Mint & Others