"Given the lack of quality nickel sulphide production for battery use, we expect to see future consolidation within the nickel sector as larger players move to secure quality assets and add mine life to their portfolios," Eden Partners said in a nickel update.

It noted ASX-listed Poseidon Nickel had been among the sector's standout performers recently after announcing high-grade drilling results at its Golden Swan nickel discovery and a circa A$22 million raising to progress towards restarting its Black Swan operations near Kalgoorlie.

Andrew Forrest's private investment vehicle Tattarang has a circa 12% stake in Poseidon.

Amid recent developments in the sector, Western Australia-based producer Western Areas confirmed last week it was in preliminary discussions regarding "a change of control proposal" with diversified miner IGO.

Western Areas MD and CEO Dan Lougher had told the Diggers & Dealers mining forum in Kalgoorlie earlier this month people were knocking on the door for long-term nickel supply.

Andrew Forrest's Wyloo Metals has since taken a 5.3% stake in Western Areas. 

Elsewhere, Wyloo and IGO are also key "supportive" shareholders of Mincor Resources, which is nearing restarting nickel production at Kambalda and has teed up 100% offtake to BHP.

Wyloo is also a major shareholder of Canada nickel junior Noront Resources and recently made a bid for the company, although Noront favours a higher offer made by BHP last month.

BHP had signed a landmark nickel supply agreement with EV manufacturer Tesla in July.

"Demand for nickel in batteries is estimated to grow by over 500% over the next decade, in large part to support the world's rising demand for electric vehicles," BHP chief commercial officer Vandita Pant said at the time.

 

On the supply side, Eden Partners also noted recent strike action at Vale's Sudbury operations and Glencore's Koniambo smelter in New Caledonia had helped reduce the surplus in the nickel market.