Along with the rise of electric vehicles comes a higher demand for commodities needed to produce them. Nickel is one of them.
Demand for nickel was already rising, and it has seen an even higher spike due to sanctions recently imposed on Russia, a top nickel producer.
Which nickel stocks will be the top contenders in the race for nickel? We’ve compiled seven of our top pick nickel companies on the Canadian exchanges.
What Are the Best Nickel Mining Stocks to Invest In?
Best Nickel Mining Stocks to Invest in 2022
In light of the many hurdles challenging the world economy recently, nickel companies and commodity investments offer some hope of stability for investors.
Additionally, investing in the electric vehicle movement reinforces important sustainability principles like energy efficiency and lower emissions. Consider diversifying with these nickel mining stocks to not only help save the world but to save your wallet.
- Ticker: FM
- Founded: 1983
- Gross revenue 2021: $7.2 billion
First Quantum Minerals Ltd. works with copper, nickel, pyrite, gold, silver, and zinc ores. Currently, the company is operating out of mines in Zambia, Panama, Finland, Turkey, Spain, Australia, and Mauritania.
The company is one of the highest producers of copper in the world, which accounts for the largest portion of its revenues.
However, First Quantum’s nickel production has also been ramping up. Namely, last year’s nickel production was 16,818 tonnes, up from 12,695 tonnes in 2020. By 2024, the First Quantum estimates nickel production to grow to 40,000 to 50,000 tonnes.
FM are currently Canada’s top nickel stocks, recently hitting their peak of $44.97 a share. Now, the stock sits at $41.01, which is a 34% increase year-to-date.
- Ticker: LUN
- Founded: 1994
- Gross revenue 2021: $3.3 billion
Lundin Mining owns and operates mines in Brazil, Portugal, Chile, the United States, and Sweden. Their mines produce base metals like copper, zinc, gold, lead, silver, and nickel.
In 2021, Lundin produced a whopping 18,353 tonnes of nickel. This year’s projections are the same as last year’s, between 15,000 and 18,000 tonnes.
Stock analysts at Goldman Sachs are bullish on Lundin’s nickel mining stocks, saying “a multi-year unprecedented bull cycle in metals is underway, with most metals in short supply”. At $13.59, LUN is currently back up near its highest price per share, which was $14.85 approximately a year ago.
The company currently offers a 140% increase in total dividends declared than the previous year, another reason it is one of the best nickel stocks in Canada.
- Ticker: TLO
- Founded: 2005
- Gross revenue 2021: N/A
Talon Metals Corp. is the newly-appointed nickel partner of Tesla, giving it a confidence boost to the nickel company stocks. The corporation currently owns a 51% interest in the Tamarack nickel-copper-cobalt project in Minnesota.
Tesla has secured a massive 75,000 tonnes of nickel over six years from Talon after achieving commercial production. This also includes cobalt and iron ore to help produce its EV batteries. Talon has yet to start nickel production, telling investors that a high-grade nickel deposit could be operational by 2026.
Being a low-cost nickel producer, Talon seems to be in the perfect position to help provide the necessary materials the US needs to flourish on its own accord.
Although far from their peak, TLO’s nickel stocks have slowly risen since 2019. These stocks could be an excellent investment if you have the patience for long-term gains.
- Ticker: ALS
- Founded: 1997
- Gross revenue 2021: $83.9 million
Altius Minerals Corporation is a mining royalty company and precious metals streaming company.
Altius focuses on long-life, high-margin operations aligned with sustainability-related global growth trends. This makes investing in nickel a no-brainer.
Nickel miners strapped for cash are the perfect target for companies like Altius. The company holds royalty interests in nickel mines in Canada, with successful investment-grade operators like Hudbay and Vale.
ALS shares are nearing their 2007 highest peak after an extended price dip. The company has been heavily reinvesting profits back into its business, with a 50.4% earnings growth in the past five years. Additionally, analyst data forecasts the future payout ratio to rise to 54% over the next three years.
- Ticker: IVN
- Founded: 1993
- Gross revenue 2021: $831 million
Ivanhoe Mines has mineral and precious metal projects located mainly in Africa. They specialize in commodities including platinum, palladium, nickel, copper, gold, rhodium, zinc, silver, germanium, and lead.
The company’s Kamoa-Kakula project is a joint venture that has been considered the world’s largest, undeveloped, high-grade copper discovery.
Ivanhoe has also decided to invest in nickel. The Platreef project has planned to produce 5 million pounds of nickel annually in Phase 1 around 2024. This will then help fund Phase 2 around 2027, in which 26 million pounds of nickel are expected to be produced annually. This could position Platreef as one of the world’s largest and low-cost nickel mines, and Ivanhoe as one of the top nickel producers.
IVN is currently sitting in its all-time peak period, up 41% from last year.
- Ticker: S
- Founded: 1927
- Gross revenue 2021: $198 million
Sherritt International mines, produces, and refines high-purity nickel and cobalt, with a mine in Cuba and a refinery in Alberta. These operations are a joint venture with General Nickel Company S.A. of Cuba. Sherritt is the largest of the Canadian nickel mining companies to mine from lateritic sources.
High-nickel cathode formulations are the top choice for long-range electric vehicle batteries. Sherritt is capable of Class 1 nickel production, and Cuba has a fourth of the world’s largest nickel reserves. This certainly makes for a dynamic duo.
The company expects between 32,000 and 34,000 tonnes this year, up from 2021 production of 31,184 tonnes. However, share prices still linger in its lower territories. The company now sits at $0.79, 53.3% of its estimated fair value.
Analysts suggest the stock will have a 12.3% increase in the next year. If you want to buy cheap nickel stocks in Canada, S could be for you.
- Ticker: POM
- Founded: 1981
- Gross revenue 2021: N/A
PolyMet Mining explores and develops natural resources like copper, nickel, cobalt, gold, silver, and platinum. Its primary mining location is the NorthMet project in Minnesota.
They intend to mine 170 million pounds of nickel once production gets up and running. However, companies that mine nickel often have environmental group opposition against them. This means that PolyMet has some obstacles to overcome before starting production.
Currently, the company is waiting for permit approvals which are all anticipated to be addressed this year.
The approval process has taken its toll on the nickel company’s stock price. Now hovering at its lowest low in a decade, POM is pretty affordable at $4.42 a share. The decision to move forward depends on whether or not the US is ready to take on domestic mining.
If you are looking to invest in nickel miners producing today, consider First Quantum, Lundin Mining, or Sherrit International. If you are ready to buy and hold for nickel companies expecting to produce long-term, Talon Metals, Ivanhoe, and PolyMet could be worth the wait. And if you are looking for a royalty company that profits from big nickel projects without taking on as much risk, Altius is your best bet.
The companies that mine nickel in Canada are Glencore Plc, Vale, and Jin Horoc Nonferrous Metal Group.
Investing in nickel is a good idea if you’d like to diversify your portfolio. The outlook for nickel is suitable for both the short and long-term. However, there are significant risks in trading nickel stocks and other commodities. Always research before buying nickel stocks to ensure they are right for you.