WA producers thrown lifeline as nickel is included in Critical Minerals List
The WA Government is throwing a lifeline to the State’s nickel producers by offering a 50% royalty rebate from Q2 CY24 for 18 months, in response to current global market challenges.
The Nickel Financial Assistance Program will provide a rebate if the average price of nickel in concentrate is below $31,000/t (US$20,000/t) for a given quarter.
The rebate will then be repayable by the companies in equal quarterly instalments over the following 24 months.
WA Premier Roger Cook says the nickel industry supports nearly 10,000 jobs and generated more than $5b in sales in FY23.
“It is also an essential component of the State’s vision of becoming a global hub for the downstream processing of battery metals,” he said.
“Protecting local jobs is a key priority for my Government, and we recognise retaining our value-add, critical minerals sector is a key part of our plan to diversify WA, and set it up for future success.
“This is highlighted by our current work to refresh and update the Government’s Future Battery and Critical Minerals Industries Strategy, which was established in 2019.
“Our Nickel Financial Assistance Program will support nickel producers in their hour of need, providing temporary assistance to help with the structural changes to the nickel industry.”
WA Treasurer Rita Saffioti says the relief is consistent with previous royalty assistance programs to assist lithium producers and junior iron ore producers to adjust to changing market conditions.
WA Mines and Petroleum Minister David Michael says the State’s nickel miners are competing internationally with mining jurisdictions that have significantly lower environment, social and governance standards.
A surge in lower cost supply from other countries coming onstream has prompted mine and processing plant suspensions in WA, significantly impacting local and regional jobs.
Nickel on critical minerals list
Federal Resources Minister Madeleine King placed nickel on the Critical Minerals List at the end of last week, giving nickel companies opportunity to access billions of dollars in Federal funding.
Since the List was updated on 16 December 2023, six operating nickel facilities have either announced reduction in operations or gone into care and maintenance.
Minister King says the nickel industry faces substantial structural challenges that cannot be addressed overnight.
“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,” she said.
“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.”
Australia offers more sustainable and ethical critical minerals on a global scale due to the high environmental, social and governance (ASG) standards in this country.
Minister King says she is progressing important discussions with international counterparts in US, Canada and EU to ensure the high standards applied in Australian mining and production of nickel and other critical minerals are reflected in future pricing on international markets.
The Minister has the discretion to review the Critical Minerals List at any time, and to make interim amendments if there are significant changes to technology, trade, domestic capacity or geopolitical developments.
The decision to place nickel on the list allows companies to have access to financing under the $4b Critical Minerals Facility and critical minerals–related grant programs such as the International Partnerships Program ($40m).
