KALGOORLIE - Global miner BHP is ploughing more investment into nickel mine development and exploration in Western Australia, seeking to secure its own supply of a key material in batteries needed to meet booming demand for electric cars.

BHP is building what is expected to be the world's largest battery-grade nickel sulphate plant on the outskirts of Perth and is boosting output to be "as self-sufficient as possible", asset president Eduard Haegel, told Reuters on the sidelines of the Diggers and Dealers mining conference in Kalgoorlie.

Nickel is in increasingly hot demand in new battery technologies that mean cars can travel further on a single charge. Using more nickel also cuts costs by reducing the amount of expensive cobalt, a mainstay of current electric vehicle (EV) battery technology.

Popular nickel, manganese and cobalt (NMC) lithium-ion batteries typically employ a ratio of 60% nickel to 20% cobalt and 20% manganese or 6:2:2. Increasingly battery makers are preparing to change the composition of these cathode materials to 80% nickel, 10 percent cobalt and 10% manganese.

As well as sourcing from its own mines, BHP also buys nickel concentrate from other miners. The move to secure more of its own supply comes as anticipated EV demand encourages other miners to go into sulphate production themselves.

Perth-based Independence Group, which supplies some of BHP's needs, has said it will assess whether to build its own nickel sulphate plant by early next year before deciding whether to renew its supply deal with BHP, set to expire at the end of 2019.

BHP's Perth nickel sulphate plant is expected to come on line from April 2019 with capacity to produce 100 000 tonnes of nickel sulphate, accounting for some 22 000 tonnes of nickel. The miner is making plans to double capacity with a potential second-stage expansion.

"I believe that we have timed our entry to the battery and nickel sulphate markets well – interest by customers and potential customers is significantly exceeding expectations," Haegel told conference delegates during a speech.

"Today, based on forward orders and indications, we now expect to achieve the 90% (sales) target...by the end of next calendar year, 2019." BHP expects to ramp up to full capacity of 100 000 tonnes over several years.

For now, BHP is developing a resources base at its Leinster mine and has internal approval to develop its Venus deposit with plans to expand the Mount Keith and Leinster concentrators in the West Australian state.

BHP is also going ahead with a trial of cobalt sulphate production at a pilot plant with a view to eventually produce a battery-grade nickel sulphate product with low cobalt sulphate content, Haegel said.

Analysts have speculated that the EV boom may encourage BHP to remove the "for sale" tag it put on its nickel division years ago. Haegel told Reuters that BHP's nickel business remains non-core, but that it has not been and is still not in any sales process.