BHP suspends WA nickel production ‘temporarily’

BHP has taken what it calls ‘the difficult but necessary decision’ to temporarily suspend its Western Australian Nickel operation, Nickel West.

The company operates open-cut and underground mines, concentrators, a smelter and refinery all located in Western Australia.

The company blamed ‘significant and sustained challenges to the Australian nickel industry’, which includes a period of low world prices for the critical metal which has been hit by global oversupply.

A sudden surge in production in China and Indonesia is largely behind the slump in prices.

Lithium-ion batteries used in electric vehicles include around 40kgs of nickel.

BHP said: “Like others in the Australian nickel sector, we have not been able to overcome the substantial economic challenges driven by a global oversupply of nickel.

“Since late last year we have been working closely and constructively with the Western Australian and federal governments on how best to jointly respond to the sustained pressure facing the Australian nickel industry.”

Since oversupply emerged BHP has been the recipient of very significant state and federal government action and aid.

Nickel has been included on the Critical Minerals List, Canberra has announced its production tax incentive proposal and the state has provided royalty relief.

BHP said: “Ultimately, the market surplus and lower prices anticipated to persist through the medium term could not be countered by the welcome policy interventions made by the WA and Federal governments.

“The unavoidable power of these global market realities is what has compelled BHP in our decision to temporarily suspend operations in this case, not government policies.”

BHP said it would continue to invest around $450 million a year in its nickel operations to enable a re-start if the market outlook improves.

The company will also commit $5 million toward supporting 30 Goldfields-based apprenticeships, and establish a $20 million Community Fund to support local communities and local businesses

Picture: BHP