This week has seen Wyloo temporarily shut down the Cassini, Long and Durkin nickel mines and BHP pause part of its Kambalda processing operations considering recent nickel price slumps in Australia.
The nickel downturn has also had an effect on other nickel miners operating in Australia, notably Chalice Mining, First Quantum Minerals, IGO and Panoramic Resources.
So it begs the question: What is the best way forward for Australian nickel?
The Association of Mining and Exploration Companies (AMEC) has called for the Federal Government to provide relief for the nickel sector, in light of BHP’s decision yesterday.
“The commercial realities being faced by the nickel industry in Australia, means some government intervention to incentivise downstream processing should be considered,” AMEC acting chief executive officer Neil van Drunen said.
“If we continue to see the current downturn in nickel and lithium prices, the government should consider all options to reassure the sector, including potential royalty relief.”
Drunen is set to represent AMEC at a minerals focused roundtable with Federal Resources Minister Madeleine King and WA Mines Minister David Michael on January 25.
“AMEC is proposing a production tax credit (PTC) to assist critical minerals producers, which would make Australia 10 per cent more competitive for downstream processing,” Drunen said.
“There is no better, and more important, time than now to include a PTC in the upcoming Commonwealth budget plans. Doing so would make Australia 10 per cent more competitive for downstream processing and (it would) send a strong message to the industry, investors and global markets, that Australia is not to be forgotten about.”
As reported by The Australian Financial Review, the January 25 meeting will hear from WA nickel miners such as BHP, Glencore, IGO and Wyloo. Wyloo is set to also push for a 10 per cent PTC.
“We need to incentivise Australian nickel production and our downstream opportunity with the introduction of a 10 per cent production tax credit, the revision of the royalties scheme and access to funding support for capital investment,” Wyloo chief executive officer Luca Giacovazzi said.
Giacovazzi will also push for a ‘green nickel price premium’, which would differentiate between the Australian-produced nickel that follows strong environmental, social and governance (ESG) standards and the ‘dirty’ nickel produced in countries such as Indonesia.
The pricing structure proposal has been supported by Minister King and Andrew Forrest.
“We also need to empower consumers to understand whether their electric vehicles are truly green and hold car manufacturers accountable for buying low-carbon nickel,” Giacovazzi said.
“We need structural change in nickel pricing that distinguishes between nickel products and their ESG credentials, and to ensure that Australia’s position as a supplier of low-carbon nickel under the United States’ Inflation Reduction Act is protected.”
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