Care and maintenance: Move to save nickel

Australian Prime Minister Anthony Albanese is “quite confident” the federal government can save Western Australia’s ailing nickel industry before it’s lights out for other mining operations. 

During a press conference yesterday (18 February 2024), Albanese told reporters nickel will be a critical mineral going forward to open the industry for further support. 

“We are looking towards smart, targeted, time limited support. This is a short-term issue for what is, in the long-term, a very critical industry for Australia.”

Premier Roger Cook has been invited by the PM to an upcoming Cabinet meeting in Perth. 

The Premier’s invitation comes after he announced the state government will offer royalty relief to the state’s nickel industry amid a wave of mine closures. 

Over the weekend, Cook said the royalty offer has been enacted to support thousands of local jobs and the state’s vision of becoming a global battery minerals processing hub. 

“The nickel industry supported almost 10,000 jobs and generated sales of more than $5 billion last financial year.  

“The nickel industry supported almost 10,000 jobs and generated sales of more than $5 billion last financial year

Protecting local jobs is a key priority for my government, and we recognise retaining our value-add, critical minerals sector is a key part of our plan to diversify WA, and set it up for future success. 

Our Nickel Financial Assistance Program will support nickel producers in their hour of need, providing temporary assistance to help with the structural changes to the nickel industry.”

The Nickel Financial Assistance Program is expected to deliver a 50% royalty rebate for 18 months, when prices are below US$20,000 per tonne, repayable over 24 months. 

The offer is being rolled out after mining giant BHP (ASX:BHP) issued a warning last week it is considering mothballing its entire Western Australia operation due to the struggling industry. 

In the event of suspension of mining, more than 3,000 workers are expected to be laid off. 

The bigger they are…

As disclosed in BHP’s January 2024 operational review, the nickel industry is facing challenges amid a sharp fall in prices. 

Operations at BHP’s Nickel West division — a fully integrated mine-to-market business operating in various locations across Western Australia — are being optimised and options are being evaluated to mitigate the impacts of the current low realised prices. 

Further, Nickel West’s Kambalda concentrator will be placed into care and maintenance in June 2024 following Wyloo Metals’ decision to suspend its Cassini and Northern Operations mines from 31 May 2024. 

The Cassini and Northern operations provide the majority of ore feed into the Kambalda concentrator, therefore it will be no longer viable for Nickel West to continue operating the milling circuit after those mines cease operating. 

BHP is also reviewing the development plans for Western Australia Nickel with a focus on preserving cash, which includes the potential to place Nickel West into a period of care and maintenance. 

The West Musgrave Project — which BHP secured as part of the Oz Minerals acquisition — is in execution and is 21% complete. BHP is currently assessing phasing and capital spend for the development of the West Musgrave project as part of the review. 

BHP will recognise a non-cash impairment charge of about US$2.5 billion (post tax) against the carrying value of Western Australia Nickel. 

The project sits in the Musgrave Province, about 1,300km northeast of Perth close to the intersection of the borders between Western Australia, South Australia, and the Northern Territory.

Up to 85% of Nickel West’s product is sold to global battery material suppliers, as per BHP.  

In January 2024, Canada’s First Quantum Minerals (TSE:FM) suspended mining at its $2.2 billion Ravensthorpe Nickel Mine in Western Australia, as reported by

Up to 30% of the 420-strong workforce is expected to be cut while mining is suspended. 

Around the same time, Panoramic Resources in December 2023 entered into voluntary administration after announcing on-site staff at the Savannah nickel mine were to be made redundant.  

This news service reached out to BHP for further comment, however, declined to comment. 

On 15 February 2024, BHP Chief Executive Officer (CEO) Mike Henry said: “This is an uncertain time for the Western Australian nickel industry and we are taking action to address the current market conditions. 

We are reducing operating costs at Western Australia Nickel and reviewing our capital plans for Nickel West and West Musgrave.”

Nickel off colour

When spoke with Western Mines Group (ASX:WMG) Managing Director Dr Caedmon Marriott in January this year, he explained what the market is seeing is the interplay of the nickel cost curve with the metal price.  

However, the MD added the future looks a little bit brighter for the critical battery metal, with a potential rebound still being on the cards.  

“The nickel projections talk about this probably being a 2025, possibly 2026 story.

The reason why it’s a 2025-2026 story is probably because by the end of this year we should have got through all the Indonesia ramp up, and all the new builds should have reached maximum capacity. Therefore there’s no incremental supply or oversupply out of Indonesia.”

Western Mines Group is a mineral explorer focused on delivering ‘high-value’ gold and nickel deposits across a portfolio of ‘highly prospective’ projects in Western Australia.   

Nickel is a strong, lustrous, silvery-white metal that is essential to modern life. About 65% of all nickel produced goes into stainless steel and modern construction, engineering, transport, and power infrastructure would not be possible without it. 

Non-steel uses for nickel include magnets, coinage, rechargeable batteries, electric guitar strings and special alloys.  

During 2023, London Metals Exchange benchmark nickel prices fell considerably as both the supply of nickel from Indonesia ‘significantly’ increased and the London Metals Exchange began accepting Indonesian-origin nickel products as part of its efforts to respond to evolving industry dynamics.

The price of nickel is currently sitting around the US$16,00 per tonne mark as of 16 February 2024, dropping 36.99% over the past year, as per Trading Economics.

Write to Adam Drought at

Images: First Quantum
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Written By Adam Drought
Born and raised in the UK, Adam is a sports fanatic with an interest in Rugby League and UFC/MMA. When not training in Muay Thai and Brazilian Jiu Jitsu, Adam attends Griffith University where he is completing his final year of a Communication & Journalism degree.