The Geology of Nickel: Two Ore Types, Two Different Supply Chains
Sulfide and laterite nickel ores are geologically distinct, which is why batteries and stainless steel have historically drawn on different rock.
Nickel is unusual among critical raw materials because its two main ore types are genuinely different rocks, formed by different processes, mined and processed with different technology, and increasingly serving different industries. Understanding which type a given deposit is tells you almost everything about its cost, its environmental footprint, and which market it actually feeds.
Sulfide deposits
Magmatic nickel sulfide deposits form when nickel-rich mafic or ultramafic magma cools and separates into an immiscible sulfide liquid, which settles out and concentrates nickel, copper, and cobalt together in minerals like pentlandite. Sudbury in Canada and Norilsk in Russia are the classic examples, and this immiscible-liquid process is also why nickel sulfide ores commonly carry meaningful copper and cobalt as co-products. Sulfide ore can be concentrated by relatively straightforward flotation and smelted using well-established pyrometallurgy, historically the preferred feedstock for both stainless steel and, more recently, battery-grade nickel.
Laterite deposits
Laterite deposits form at the earth’s surface, not deep within it: intense tropical weathering breaks down nickel-bearing ultramafic rock over millions of years, leaching most elements away and leaving nickel and cobalt concentrated in oxide- and clay-rich soil horizons, the same weathering process covered in more depth on cobalt’s geology page. Indonesia and the Philippines, both near the equator with extensive ultramafic terrain, host the world’s largest laterite resources. Laterite ore cannot be processed by simple flotation, since the metal sits in oxide and silicate structures rather than discrete sulfide grains, historically requiring energy-intensive pyrometallurgical or hydrometallurgical routes.
Why the split matters now
For decades laterite nickel mostly served the stainless steel industry through a relatively low-grade product called nickel pig iron, while sulfide ore fed the higher-purity nickel that battery chemistries need. Indonesia’s rapid build-out of high-pressure acid leaching (HPAL) plants, covered on this material’s mining page, has been an attempt to convert laterite ore into battery-grade nickel directly, a genuine geological and metallurgical challenge, not just an investment decision, since laterite ore’s mineralogy is intrinsically harder to refine to battery purity than sulfide ore.
Sources: deposit-type framing draws on standard economic geology references (USGS Mineral Commodity Summaries, British Geological Survey); production figures reference the production data elsewhere on this site.