Forrest the next to close WA nickel mines as price slumps

Andrew Forrest’s Wyloo Metals in the latest nickel miner to shut down its West Australian operations due to low prices for the key steel and battery ingredient.

Wyloo chief executive Luca Giacovazzi said the decision to temporarily pause operations at its WA mines, bought in mid-2023 for $760 million, would allow Wyloo to assess its options to achieve its long-term strategy to mine and process nickel in its own facilities in Kambalda and Kwinana.

Andrew Forrest wants to invest in green hydrogen as well as battery minerals in an emissions-reduction business strategy.
Andrew Forrest wants to invest in green hydrogen as well as battery minerals in an emissions-reduction business strategy.Credit: WEF / Greg Beadle

Forrest’s privately owned company will put its Cassini mine 130 kilometres south of Kalgoorlie and a group of mines about 50 kilometres south of the mining town into care and maintenance on 31 May.

Wyloo plans to retain most of its 44 employees on the sites and work with its mining contractor to redeploy its workers.

Giacovazzi said Wyloo’s priority was to support its people through the transition.

Wyloo’s ore is processed at BHP’s nickel concentrator at Kambalda. Last week, the big miner said it may write down the value of its WA nickel business and would start cutting costs after the price of the steel-making ingredient plunged 24 per cent in 12 months.

BHP chief executive Mike Henry said the company was “evaluating options to mitigate the impacts of the sharp fall in nickel prices,” and announce its decision in February.

In the three months to December, the price of nickel fell 17 per cent to $US16,812 a tonne, leading BHP to cut costs and reassess the value of the business that employs 2500 workers at three mines, ore concentrators at Kambalda and Kalgoorlie and a refinery south of Perth.

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Already in January, Canadian miner First Quantum Minerals said it would stop mining at its Ravensthorpe nickel mine in WA’s south and switch to processing stockpiles, resulting in a 30 per cent cut to its 420-strong workforce, and smaller prospector Panoramic Resources’ Savannah nickel project in WA’s Kimberley was suspended by its administrators with 140 jobs lost.

Wyloo believes nickel from its mines should attract a price premium for their relatively smaller environmental footprint.

Giacovazzi said the London Metal Exchange was “awash with pollutive nickel which is squeezing out clean nickel from Australian producers”.

“We need to see structural change in nickel pricing that distinguishes between nickel products as well as their ESG credentials,” he said.

In 2021, Wyloo won a high-profile bidding war with BHP to seize ownership of Canadian nickel play Noront Resources for about $675 million.

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Source: Thanks smh.com