Australia has added nickel to its critical resources list, giving nickel producers the opportunity to access billions of dollars in federal funding.
Nickel prices have fallen by 40pc over the past year due to a weaker macro-economic outlook, lower demand in the Chinese construction and manufacturing sectors and US dollar strength. A rapid production ramp-up in Indonesia has also added to global oversupply.
Mining company BHP recently announced plans to shut down its Nickel West operations in Western Australia, citing weak prices. Six other operating nickel facilities have either announced reductions in operations or gone into care and maintenance the last quarter, the government says.
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“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,” says Australian federal resources minister Madeleine King. “I am fully convinced that we must be proactive in addressing the recent developments, including by adding nickel to the Critical Minerals List.”
Nickel is one of the key minerals used in lithium-ion batteries, although this sector currently only represents about 10pc of global nickel demand, according to the International Energy Agency (IEA).
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