Nickel Designated Critical Mineral: Unlocking Relief for Industry Amid Downturn
Tajha Pritchard
Federal Resources Minister Madeleine King has designated nickel as a critical mineral, unlocking access to billions of dollars in relief for nickel companies.
Since the last update of the critical minerals list on December 16 last year, several nickel facilities have either reduced operations or entered care and maintenance. Among those affected are Andrew Forrest’s Wyloo, IGO, First Quantum Minerals, Chalice Mining, and Panoramic Resources.
BHP recently announced the closure of part of its Kambalda processing operations, and it's contemplating placing its Nickel West operations into care and maintenance, potentially jeopardizing thousands of jobs.
However, the inclusion of nickel on the critical minerals list means companies can now access financing through $4 billion in critical minerals grant programs, including the $40 million international partnerships program. Such grants could help operators navigate the nickel downturn and prevent closures.
Minister King acknowledged the significant challenges facing the nickel industry, with low international nickel prices expected to persist until the market surplus is addressed.
The decision to classify nickel as a critical mineral follows a roundtable discussion led by Minister King and Western Australian Minister for Mines David Michael, where industry challenges were addressed. Both federal and state governments committed to expediting nickel taxation and royalties incentivization.
WA Premier Roger Cook announced a 50% royalty relief program if the average price of nickel concentrate falls below $US20,000 per tonne, with companies required to repay the rebate in equal quarterly installments over 24 months.
AMEC CEO Warren Pearce welcomed the addition of nickel to the critical minerals list and the relief packages but emphasized the need for further action, suggesting the introduction of a Production Tax Credit (PTC) similar to the one in the United States. This, he argued, would ensure Australia remains competitive in the global energy transition.