Standard definitions of “reserves” and “resources” are important because the concepts are highly relevant to investors in mining projects. The main distinction is that “reserves” imply an increased level of knowledge and confidence. The exploration activities of mining companies continuously convert resources into reserves. This means the availability of raw materials such as nickel is less about whether there is enough in the ground, but rather more about whether there is enough production capacity available in a short time frame to satisfy a sharp increase in demand.
The cost-effective solution to this is that driven by attractive commodity prices, various factors have influenced this evolution, including better knowledge and increased exploration activities in remote areas. Improved technologies in mining, smelting, and refining, as well as increased capacities, also allow for lower-grade nickel ore and more complex mineralogy to be processed economically.