A new nickel mine that just opened in Western Australia is pinning its hopes on the use of nickel in electric vehicle batteries – an up and coming market for nickel that could significantly buttress demand for the base metal up to now used primarily for steelmaking.

On Friday WA Mines Minister Bill Johnston officially opened the $456 million Nova nickel-copper mine located southeast of Kalgoorlie-Boulder, ABC News reported.

The site notes that the opening is good news for the area which has seen mines closing in Ravensthorpe, Kambalda and the Kimberley over the past two years. It would reach full production at end of September, around the same time that the Ravensthorpe mine is due to shutter.

Nova started commercial production in July and has been under development since 2012 when drilling started. A maiden resource was released in May 2013, with the nearby Bollinger Deposit discovered the same year. Independence Group (IGO) acquired the project through an acquisition of Sirius Resources NL in 2015. The mine is expected to produce between 23,000 and 27,000 tonnes of nickel in 2018, 10,000 to 12,000 tonnes of copper and 800 to 1,050 tonnes of cobalt, states a project page.

IGO stock enjoyed a five-day lift of 11.3% between last Monday and Friday, closing at AUD$3.93 a share on the ASX, Friday.

According to IGO managing director Peter Bradford, the nickel industry is seeing a "structural shift" whereby nickel will see "significant demand" from EV battery manufacturers in the next five to eight years. However he cautioned that the benefits from that shift for nickel producers has yet to occur.

"What we've seen in recent times is that demand in stainless steel has been strong and that's resulted in the movement of the price," ABC quoted him saying. The nickel price has moved from a low of $4 a pound over the last year to its current $5.46/lb.

Among the several different varieties of lithium-ion batteries used in electric vehicles and other applications, nickel is a component of lithium-nickel-manganese-cobalt-oxide (NMC) batteries and lithium-nickel-aluminum-cobalt-oxide batteries.

Concentrate from the Nova mine will be processed at BHP's (NYSE,ASX: BHP) Nickel West business and exported through the WA port of Esperance.

A month ago BHP announced the mega-miner will spend $43 million to build a nickel processing plant near Perth as part of plan to reposition the business around batteries. It expects demand for nickel-contained EV batteries to represent around 90% of Nickel West's output within five or six years, replacing traditional marketshare such as stainless steel makers.

• [Editor:tianmichai]