Australia's nickel producers reel from supply glut

Reuters

January 18, 2024

A sharp slide in nickel prices over the past year, driven by a jump in Indonesian supply, has hit Australian nickel producers, leading to mine closures, production cuts and writedowns in recent months.

Australia is the world's fifth biggest producer of mined and refined nickel, with output led by BHP Group.

Following are moves by nickel producers and developers to cope with the slump:

* BHP, the world's biggest listed miner, said on Thursday it was reevaluating its nickel business. Analysts said it may need to write down its $1.2 billion West Musgrave project and could potentially delay it. It will provide more detail at its half year earnings on Feb. 20.

BHP signed a deal to supply nickel to Tesla in 2021.

* Canada's First Quantum Minerals on Monday said it will cut jobs and production at its Ravensthorpe mine in Australia due to a "significant" downturn in prices that it expects to last three years.

* Panoramic Resources went into voluntary administration in December. On Jan. 8, its administrators said operations at its Savannah nickel project would be suspended as the "prospect of achieving a near-term turnaround of operations and finances is low". The project remains up for sale.

* Battery materials producer IGO flagged in December it expects to book a further impairment to its Cosmos nickel project when it reports on Jan. 31, adding to an almost A$1 billion writedown in the 2023 financial year.

(Reporting by Melanie Burton; Editing by Sonali Paul)
 

 

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