Geopolitical risks are baked into the nickel supply

With the concentration of nickel in countries such as New Caledonia and Philippines, the nickel supply faces jurisdictional risk, said FPX Nickel's CEO Martin Turenne.

On Friday Turenne recorded Kitco Roundtable podcast with Mining Audiences Manager Michael McCrae, Kitco correspondent Paul Harris and editor Neils Christensen. 

FPX Nickel (TSX-V:FPX) is a Vancouver-based junior nickel mining company developing the large-scale Decar Nickel District in central British Columbia.

The French protectorate of New Caledonia has been facing political strife as an independence vote looms later this year. Early this century the region's nickel reserves were estimated at 11% of the world's total. The Philippines are also a significant nickel producer but have had a bumpy track record with managing its mining regulations, making the country hard to invest in. 

Turenne said Indonesia is the Saudi Arabia of nickel due to the amount of supply coming online in that country, but much of the power for the mines in those countries will be from dirty sources, such as coal and diesel. 

Nickel has become a key metal for electric vehicles and demand is forecast to climb significantly higher. 

"You have a lot of geopolitical risks that's baked into a nickel supply. Some of the major nickel producers in the world like Canada and Australia...are relatively stable...and tend to benefit when there's geopolitical disruptions," said Turenne.