BHP “temporarily” halts nickel production in WA

BHP has made what it calls a “difficult but necessary decision” to temporarily close its nickel operation in Western Australia, Nickel West.

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

The company blamed “significant and ongoing challenges facing Australia’s nickel industry,” including a period of low world prices for the important metal, which suffered from global oversupply.

The sudden increase in production in China and Indonesia is largely responsible for the price collapse.

The lithium-ion batteries used in electric vehicles contain about 40 kg of nickel.

BHP said: “Like other companies in Australia’s nickel sector, we have been unable to overcome the significant economic challenges created by a global oversupply of nickel.

“Since late last year, we have been working closely and constructively with the Western Australian and Federal Governments to jointly determine the best way to respond to the ongoing pressures facing the Australian nickel industry.”

Since the oversupply situation arose, BHP has received significant support and assistance from the state and federal governments.

Nickel has been added to the list of critical minerals, Canberra has announced its proposal for production tax incentives and the government has granted a royalty reduction.

BHP said: “Ultimately, welcome policy interventions by the Western Australian and Federal Governments have not been able to counteract the market surplus and lower prices expected over the medium term.

“It was the inescapable force of these global market realities that led BHP to our decision to temporarily suspend operations in this case, not government policy.”

BHP said it would continue to invest around $450 million annually in its nickel production to enable a restart if market prospects improve.

The company will also provide $5 million to support 30 apprenticeships in the goldfields and establish a $20 million community fund to support local communities and local businesses.

Image: BHP