Australia adds nickel to critical mineral list after price drop shuts operations

Australia added nickel to its critical minerals list as it expects weak prices for the battery metal to persist and pressure operators through 2024.

Six nickel facilities in the country have reduced operations or gone into care and maintenance since mid-December 2023 as a result of the collapse in nickel prices, Minister for Resources Madeleine King said Feb. 16 in announcing the list expansion.

With nickel on the list, miners can now access financing under the A$4 billion Critical Minerals Facility and grants such as the International Partnerships Program, King said.

The London Metal Exchange nickel price was at $16,089.50 per metric ton on Feb. 14, down 39% year over year, according to S&P Global Market Intelligence data.

"The international nickel price is forecast to stay relatively low through 2024, and likely for several years to come until the surplus of nickel in the market is corrected," King said in a statement. "In the meantime, this puts further Australian nickel operations at risk."

"Given impacts to our domestic capacity and noting the broader market developments presently unfolding in the nickel sector, I am fully convinced that we must be proactive in addressing the recent developments, including by adding nickel to the critical minerals list."

BHP Group Ltd. said Feb. 15 that it would write down its nickel assets in Western Australia by about US$2.5 billion posttax.

Nickel's price plunge prompted federal and Western Australia officials to hold crisis talks with miners on Jan. 25 to explore strategies for protecting domestic production against a flood of Indonesian supply.

Australian miners called on the government for much of last year to add nickel and copper to the critical minerals list, but the country adopted a new list in December 2023, with only copper on a secondary list. The government said at the time it would plan strategic material hubs to help nickel and copper miners instead.

Australia, which has the third-largest deposits of nickel, steadily increased production from 149,800 metric tons in 2021 to 171,200 metric tons in 2023. However, its share of global output has fallen from 5.5% to 4.8% over that time, according to S&P Global Market Intelligence data, amid surging Indonesian supply.

Nickel is needed for stainless steel and electric vehicle batteries.