A White Paper in Toronto Just Changed the Nickel Alloy Conversation

The nickel alloy market has been buzzing since early June. First Atlantic Nickel & Cobalt Corp. showed up at the Critical Minerals for Defence conference in Toronto and dropped a white paper that got people talking . The title says it all: “Onshoring the Nickel-Cobalt Supply Chain. Without A Smelter.”

Here is why that matters. North America has a nickel problem. The United States has zero operational nickel smelters. Canada has two left, both in Sudbury, Ontario . The last US smelter in Riddle, Oregon closed back in 1998. Vale’s Thompson smelter in Manitoba shut down in 2018 . Meanwhile, the Carnegie Endowment for International Peace projects a US nickel shortfall of more than 740,000 tonnes by 2035 . That is a gap of 9,275 percent between domestic production and projected demand.

So when a company says it can process nickel without a smelter, people pay attention. First Atlantic is sitting on a deposit called Pipestone XL in Newfoundland. The ore contains awaruite, a naturally occurring nickel-iron-cobalt alloy. Electron microprobe analysis by SGS Canada confirmed that awaruite from the RPM Zone averages 77.62 percent nickel and 1.69 percent cobalt . Those are high numbers.

The kicker is awaruite does not need to go through a smelter. Because it already exists in metallic form, you can run it through magnetic separation and flotation to get a concentrate that is roughly 60 percent nickel . No roasting. No high-pressure acid leaching. No smelting. The Battery Metals Association of Canada called it one of the lowest carbon-intensity nickel production routes in the global market .

The defense sector is taking notice. First Atlantic got accepted into the US Defense Industrial Base Consortium this year. Nickel is listed as one of 13 defense-critical minerals in the consortium’s first Request for Project Proposals . The Department of War can make direct investments through the Defense Production Act to expand domestic capacity where supply chains are too dependent on foreign sources . Canada qualifies as a “domestic source” under Title III of that act.

The broader nickel alloy market numbers back up the interest. The global nickel alloy market was valued at roughly $17 billion in 2025 and is projected to hit $26 billion by 2034, growing at about 5 percent annually . Aerospace and defense account for about 28 percent of that consumption. Over 70 percent of US aircraft engine components use nickel-based superalloys because they can handle temperatures above 1,000 degrees Celsius .

Other sectors are pulling demand too. The oil and gas industry uses nickel alloys for about 60 percent of offshore drilling equipment . Power generation accounts for about 14 percent of the market. Over 65 percent of gas turbine components in power plants use nickel alloys for heat resistance and oxidation stability .

Norilsk Nickel, one of the world’s largest nickel producers, expects the global nickel surplus to shrink significantly this year. The company said in its June market review that the surplus will drop to about 20,000 metric tons in 2026, down from earlier estimates of 200,000 tons . They pointed to two reasons. First, Indonesian supply controls are starting to bite. Second, sulfur prices have spiked from about $300 to over $1,000 per metric ton because of the Middle East crisis, making HPAL production more expensive .

For alloy buyers, this creates a mixed picture. The market is still in surplus overall. But the surplus is shrinking. Class I nickel is available. Nickel intermediates are getting tighter. And a new supply option that bypasses the smelter bottleneck is moving from a white paper to a real possibility.

First Atlantic is still in exploration mode. Drilling is ongoing at their Alloy Max North and South targets, about 7 kilometers north of the RPM Zone within the same 30-kilometer ophiolite complex . But the company has a plan. Magnetic separation and flotation at the mine site. A 60 percent nickel concentrate shipped directly to downstream refiners. No smelter needed.

That is what makes this story different from a standard mining announcement. The standard path is mine to smelter to refinery. Awaruite cuts out the middle step. And in a North America with only two smelters left, that changes the math.