BHP halts nickel production in Western Australia due to price collapse (NYSE:BHP)

BHP Group (NYSE: BHP) will temporarily halt its nickel production in Western Australia as there is a global oversupply of the battery metal and this has led to a drop in prices, it said on Thursday.

“Like others in the Australian nickel sector, we were unable to to overcome the significant economic challenges caused by a global oversupply of nickel,” said BHP Group (BHP) it said in a statement.

The market surplus and lower prices, which are expected to persist in the medium term, “may not be offset by the welcome policy interventions” of federal and state governments, the miner added.

Global oversupply, mainly due to increased production by the world’s largest nickel producer, Indonesia, has caused prices to fall, leading to production cuts and some mining companies even abandoning their projects altogether.

The BHP Group (BHP) has also laid off around a quarter of the workers building its West Musgrave nickel and copper project in Western Australia. The mining group has already announced an impairment of 2.5 billion Australian dollars in connection with its ailing nickel business in Western Australia.

Potentially relevant stocks include Vale (VALE), Rio Tinto (RIO), Glencore (OTCPK:GLCNF) (OTCPK:GLNCY) and Anglo American (OTCQX:AAUKF) (OTCQX:NGLOY).