Australia Elevates Nickel to ‘Critical Mineral’ Status Amid Industry Crisis

Australia has officially designated nickel as a "critical mineral," a strategic move aimed at unlocking substantial government support for the beleaguered nickel industry. This decision, announced on Friday, February 16, 2024, comes in response to the industry's challenges, including the threat of significant job losses following a 40% decline in nickel prices due to increased supply from Indonesia.

Resources Minister Madeleine King stated that the international nickel price is expected to remain low through 2024 and potentially beyond, until the surplus in the market adjusts. This situation has placed additional pressure on Australian nickel operations, prompting the government's intervention.

By listing nickel among critical minerals, Australian nickel companies will now be eligible for financing under the country's A$4 billion ($2.6 billion) Critical Minerals Facility and associated grant programs. This financial support is intended to level the playing field for Australian resources, ensuring they remain competitive on the global stage.

The industry's difficulties were underscored by BHP's recent announcement that it is considering placing its Nickel West division into care and maintenance, alongside a $2.5 billion writedown. This division employs 3,000 individuals and its potential shutdown highlights the broader challenges facing the sector.

Australia's approach to nickel mining, characterized by high environmental, social, and governance (ESG) standards, positions the country as a provider of more sustainable and ethical critical minerals compared to many competitors. Efforts are underway to ensure these high standards are recognized in international markets, with discussions involving counterparts in the U.S., Canada, and the EU.

Despite these initiatives, the national nickel industry remains in a precarious position, with Premier Roger Cook announcing royalty relief for nickel miners and calls for further federal assistance intensifying. The industry seeks a range of measures, including Commonwealth tax credits, to navigate through the current crisis and secure a sustainable future for nickel mining in Australia.