* Could expand nickel ops through exploration or acquisitions
* Comes amid surging demand for materials used in EV batteries
* But BHP not looking to produce lithium
MELBOURNE, May 22 (Reuters) - Global miner BHP Group BHP.AX BHPB.L on Wednesday said it plans to expand its nickel sulphide operations amid an expected boom in demand for the material in electric vehicle batteries.
But the company is not looking to produce main battery ingredient lithium as it sees such output having slimmer profits.
Speaking at a strategy briefing on long-term asset allocation, BHP Chief Financial Officer Peter Beaven said growth in nickel could come from either exploration or acquisitions.
"We are interested in adding more nickel sulphide resources to our portfolio, so we should continue to add exploration options in these areas," he said.
"We do not need to do M&A, but we never discount it as a way to acquire great resource bases."
The world's biggest miner earlier this month said it had decided to hold on to its Nickel West operations in the state of Western Australia, which it had previously put up for sale. is in demand to allow electric cars to travel further on a single charge. Using more nickel also cuts costs by reducing the use of expensive cobalt, a mainstay of current EV batteries.
Miners of nickel sulphide in Western Australia that could feed BHP's operations, as well as being potential takeover targets, include Western Areas Ltd WSA.AX , Independence Group IGO.AX , Panoramic Resources PAN.AX , Mincor MCR.AX and Cassini Resources Ltd CZI.AX .
However, Vice President of Strategy Paul Perry said BHP was not looking to move into lithium, expecting profits in that sector to be hit as more supply comes online in the wake of cheaper production techniques.
"The available economic profit ... in that industry for the next couple of decades really isn't there," he said.
BHP's battery strategy marks a contrast to rival Rio Tinto RIO.AX RIO.L , which has a huge but still undeveloped lithium deposit, Jadar, in Serbia.
Beaven also said that BHP needed more options for growth in copper and oil, but was unlikely to add significant new capacity in iron ore or metallurgical coal beyond increases that come from improved productivity.