BHP to Temporarily Suspend Western Australia Nickel Operations Amid Market Oversupply
BHP has announced a temporary suspension of its Nickel West operations and the West Musgrave project, collectively known as Western Australia Nickel, starting in October 2024. This decision comes in response to an oversupply in the global nickel market, with forward consensus prices projected to decline significantly due to the growth of alternative low-cost nickel supplies.
The suspension will affect several operations, including the Kwinana nickel refinery, the Kalgoorlie nickel smelter, and the Mt Keith and Leinster operations, as well as the development of the West Musgrave project. BHP plans to review this decision by February 2027.
Despite the suspension, BHP is committed to supporting its workforce and local communities during this period. The company will invest approximately US$300 million (AU$450 million) per year post-transition to facilitate a potential restart of operations. The transition period is set to begin in July 2024, with operations halting in October 2024 and handover activities for the suspension completed by December 2024.
During the suspension, BHP will:
- Halt mining and processing activities at the affected sites.
- Implement a care and maintenance program to ensure the safety and integrity of its mines and infrastructure.
- Continue investment in exploration to extend the resource life of Western Australia Nickel and maintain future options.
- Offer alternative roles within BHP to frontline employees or provide redundancy options, along with establishing a AU$20 million Community Fund to support local communities.
Since FY2020, BHP has invested approximately US$3 billion (AU$4.4 billion) to sustain Western Australia Nickel as an ongoing business and to reorient its strategic direction.
