Estrella to supply Glencore’s WA plant with 2,500tn of high grade nickel sulphide this month

Nickel explorer Estrella Resources (ASX:ESR) — a smallcap company that already holds a contract to supply Glencore — on Thursday revealed it will ship 2,500tn of high grade nickel sulphide ore to the mining giant before February. 

The news comes on the back of successful nickel ore extraction carried out over the Christmas period with mining and crushing operations going to plan. 

That ore will be trucked off to Glencore’s Western Australian Murrin Murrin acid leaching plant which will see the first stage of downstream processing completed before the nickel is turned into a metal. 

Nickel sulphide is the desired style of mineralisation (as opposed to laterites) in EV battery supply chains. 

Nickel and copper are both crucial elements in EV batteries, with far more of each required per unit than lithium itself. 

Assay work underway 

The company is awaiting the results of assay laboratory work on the ore, with grades and moisture content to be revealed shortly. 

Another 1,000 tonnes of lower grade nickel sulphide ore will remain on-site in the company’s storage facilities to be reserved for the metallurgy team, to assess how well the product reacts to further second-stage downstream processing. 

The slated for Glencore comes from the 5A target at the company’s Spargoville project which contains an existing open pit nickel mine. 

The company hit high-grade nickel at 5A back in October last year. and its agreement with Glencore was signed a month later. 

Nickel prices remain elevated 

Estrella perceives by utilising Glencore’s acid leaching plant, the company can continue the comparatively cheaper option of cut back open pit mining. 

Estrella highlighted that nickel prices currently sat at around A$40,000 per tonne last month. 

For this reason, Estrella chief Christopher Daws wrote, the company has decided to retain its rights at Spargoville and push forward with development. 

While Estrella is having a good run, its six month charts show an illiquidity problem