Nickel prices are set to reach highs previously seen in 2007, said Mark Selby, president and CEO of Royal Nickel, at a Canadian Institute of Mining event Thursday.
Selby said he expects nickel prices to $15 to $20 per pound by mid-2015.
The reason, he said, is Indonesia's decision to cease nickel exports indefinitely.
Indonesia contains 25 per cent of the world's nickel supply.
“To give you an idea of just how much that is, in the oil business that would be the equivalent of waking up Monday morning and finding out that Saudi Arabia, Iran, Iraq, Kuwait and all of the other Gulf states decided not to produce oil anymore,” Selby said.
The country has stopped exporting the metal to build the ore processing infrastructure needed to create more value from its nickel.
In 2009, when the Indonesian Parliament first discussed ceasing copper and nickel exports, nickel left the country with only 10 to 15 per cent of its end value.
“There's a massive amount of value to be captured by building these plants in the country,” Selby said.
In January 2014, just before Indonesia closed its borders to nickel exports, the metal sold for around $6 a pound. This week nickel prices were as high as $9.50 a pound.
But Selby made his announcement after a two-day stretch were nickel prices fell 10 per cent. The closing price for nickel on Thursday, May 15, was $8.50 per pound.