Alliance Nickel Eyes 2027 for NiWest Project Amid Nickel Industry Challenges
Alliance Nickel plans to commence production from its NiWest battery metals project around the same time BHP Nickel West hopes to resume operations in 2027. The Perth-based company outlined its vision in a recent quarterly activities report, highlighting the difficulties facing the nickel industry as it advances its NiWest nickel-cobalt project, located 50 kilometers southeast of Leonora.
Alliance aims to produce 90,000 tonnes of nickel sulphate and 7,000 tonnes of cobalt sulphate annually from the NiWest project. Currently under review by the Environmental Protection Authority, the project was granted major project status in May. This marked the first major project status awarded to a nickel project since the metal was added to the critical minerals list earlier this year, aiming to support the struggling industry.
Nickel prices have significantly declined, nearly halving on the London Metals Exchange throughout 2023. This drop has led at least five nickel producers in Western Australia to reduce or halt operations. The most recent casualty was BHP's Nickel West division, which plans to suspend operations from October due to low prices and oversupplied global markets.
Alliance acknowledged that BHP's suspension would affect many in the nickel mining and processing sectors. However, BHP's Nickel West operations are scheduled to restart in February 2027, coinciding with Alliance's projected first production at NiWest.
Despite industry setbacks, Glencore's Murrin Murrin operations, located 40 kilometers from the NiWest project, remain active. Glencore continues to perform beneficiation, processing, and refining into class one nickel, offering some optimism for the region.
Alliance expressed confidence in long-term nickel price forecasts, predicting significant improvements due to increasing demand for Inflation Reduction Act-compliant metals and US subsidies. The company believes the fundamentals for robust nickel demand growth remain strong, driven by the electric vehicle and energy storage markets.
Alliance anticipates continued demand for premium class one nickel metal sourced from ESG-focused producers and downstream processors, which should benefit companies like Alliance. While cobalt prices are expected to stay low in the near term, the company hopes for increased market demand by 2030.
The definitive feasibility study (DFS) for the NiWest project is well advanced and expected to be completed in the second half of 2024. To support the DFS and final metallurgical test work, Alliance secured a $4 million loan facility from its major shareholder, Zeta Resources.
