What is the difference between reserves and resources?
Standard definitions of “reserves” and “resources” are important because the concepts are highly relevant to investors in mining projects. The main distinction is that “reserves” imply an increased level of knowledge and confidence. The exploration activities of mining companies continuously convert resources into reserves. This means the availability of raw materials such as nickel is less about whether there is enough in the ground, but rather more about whether there is enough production capacity available in a short time frame to satisfy a sharp increase in demand.
Nickel reserves and resources
Today, the world’s nickel reserves are estimated at 89 million tons, as recently confirmed by the US Geological Survey[1], with around two million tons being mined annually. Resources in classical ore deposits are estimated at almost 300 million tons.[2]
Economic concentrations of nickel occur in sulphide and in laterite-type ore. Rich deposits are found in Australia, Indonesia, South Africa, Russia and Canada, which together account for more than 50% of the global nickel resources.
Although there has been a significant increase in nickel mining over the past three decades, known nickel reserves and resources have also steadily grown.
Driven by attractive commodity prices, various factors have influenced this evolution, including better knowledge and increased exploration activities in remote areas. Improved technologies in mining, smelting and refining, as well as increased capacities, also allow for lower-grade nickel ore and more complex mineralogy to be processed economically.
Nine countries account for 75% of global nickel reserves. Laterite-type (or oxide-type) resources are found in Indonesia, the Philippines, Brazil, Cuba and New Caledonia. These ore deposits and mines are principally found in equatorial regions and production from this type of deposits has steadily increased in recent decades.
Sulphide-type deposits are present in South Africa, Russia and Canada.
Australia is endowed with both sulphide- and laterite-type ore deposits.
Future nickel resources
When it comes to future resources, there are also believed to be additional significant nickel deposits in the sea. Manganese nodules, which are found on the deep-sea floor, contain significant amounts of various metals, including nickel. Recent estimates indicate that there are more than 290 million tons of nickel contained in such deposits.[3] Deep-sea mining is in its infancy. Technologies and proper regulatory frameworks are expected to be developed to facilitate access to these resources in the future.