The Australian battery mineral industry is experiencing a significant downturn, with prices for lithium, nickel, and other essential battery minerals plummeting. This alarming trend has led to the closure of several mines and calls for government attention to address the industry’s structural challenges.
Recent reports from the Australian Financial Review and The Australian highlight a staggering 85% drop in lithium prices over the past year, severely impacting lithium mining operations across Australia. This downturn has led to the largest lender in the US withdrawing a substantial loan of A$760 million from Liontown Resources in Western Australia (WA). Similarly, nickel prices have seen a 50% decline, primarily due to an influx of low-quality nickel laterite exports from Indonesia, driven by Chinese investments.
Industry-Wide Impact and Response
The ripple effect of these falling prices is evident in production shutdowns and job losses. For instance, mining giant BHP Billiton reported a sharp 24% decrease in nickel prices and has warned of reduced nickel production in WA in response to these “structural changes”. Likewise, Panoramic Resources entered voluntary trusteeship, closing its nickel mines like Savannah in Kimberley, WA, and iron ore tycoon Andrew Forrest shut down the Wyloo nickel mine, resulting in a loss of 1,000 jobs in the region.
The Call for a ‘Green Premium’
There’s a growing sentiment within the Australian mining sector that the London Metal Exchange should introduce a “green premium” for environmentally compliant products like “green nickel”. This comes in response to Indonesian miners not adhering to workplace and environmental standards, contributing to issues like high carbon emissions, deforestation, and marine pollution.
In response to these challenges, Australian companies are exploring alternative strategies. South 32 is considering converting its ferronickel production in Colombia and investing in manganese mines and battery R&D programs in Arizona. This move aims to replace cobalt and nickel with manganese and leverage the US Inflation Reduction Act (IRA) subsidies for battery plant resources.
The Federal Minister for Resources, Madeline King, alongside WA Mining Minister David Michael, is scheduled to hold crisis talks with nickel and lithium miners on January 25th. These discussions aim to explore solutions to help the industry compete against low-grade, low-priced products from overseas competitors. 
