Metalshub and LME Eye ‘Green’ Nickel Market Development Amid Rising ESG Demand

Amidst growing calls for environmentally sustainable practices within the mining sector, the London Metal Exchange (LME) and Metalshub, an online trading platform, are addressing market demand for "green" nickel, essential for electric vehicle batteries and other green technologies. Despite the LME's reservation about launching a separate contract for green nickel due to current market limitations, Metalshub is pioneering an index price that could pave the way for a green premium in the nickel market.

The LME has acknowledged the complexity in defining "green" nickel, stemming from the ongoing debate over its exact criteria. This has led to a cautious stance towards establishing contracts for narrower market segments, including class 2 materials like nickel sulphate. However, industry leaders, including Australian magnate Andrew Forrest of Fortescue, have urged the LME to categorize nickel into "clean" and "dirty" segments to provide more transparency and choice for consumers concerned about environmental sustainability.

This sentiment is echoed in the international arena, with Canada and Australia advocating for robust environmental, social, and governance (ESG) credentials in the critical minerals supply chain. Recognizing the evolving market dynamics, MetalsHub is taking proactive steps to cater to this demand by enabling class 1 nickel listings on its platform to include specific ESG credentials, including carbon footprints. This innovative approach allows buyers to prioritize low-carbon intensity materials, setting the stage for a market-driven green premium.

Starting this month, MetalsHub will report on trades involving low-carbon nickel, with plans to develop a low-carbon index price. This initiative is expected to grow into a comprehensive green nickel premium index that incorporates broader sustainability metrics. Frank Jackel, Metalshub's managing director, emphasizes the significance of CO2 footprint and ESG performance, suggesting that producers could potentially command a market premium for their environmentally friendly products.