Nickel added to critical minerals list

Nickel has been placed on Australia’s critical minerals list in a bid to aid the flailing industry, which Resources Minister Madeleine King says faces substantial structural challenges.

It comes after nickel was left off the critical minerals list when it was last updated in December and previously in June. The commodity was instead placed on the strategic materials list.

The federal government said since the list was last updated, six nickel facilities had either announced a reduction in operations or been placed on care and maintenance. 

Adding nickel - a metal subject to a halving of price in the past 12 months due to deluge of Indonesian supply - to the critical minerals list would enable companies to access Commonwealth funding, including finance under the $4 billion Critical Minerals Facility, as well as critical minerals related grant programs.

In a statement today, Ms King said the nickel industry faced substantial structural challenges that could not be addressed overnight.

“The international nickel price is forecast to stay relatively low through 2024, and likely for several years to come until the surplus of nickel in the market is corrected,” she said.

“In the meantime, this puts further Australian nickel operations at risk.

“Given impacts to our domestic capacity and noting the broader market developments presently unfolding in the nickel sector, I am fully convinced that we must be proactive in addressing the recent developments, including by adding nickel to the Critical Minerals List.”

It comes after BHP announced yesterday it was writing-down the value of its Nickel West and West Musgrave assets by $5.4 billion, further dampening the future of the state’s nickel industry.

Ms King has held crisis talks with nickel producers and state leaders around possible support for the sector, including the potential for royalty relief to lighten the cost of mining nickel in WA.

Speaking on 6PR this morning, she said royalty relief was the remit of the state, and that she was in daily discussion with Premier Roger Cook.

She acknowledged that a metal in surplus around the world, as nickel is, would not normally qualify for critical minerals status.

"It doesn't fit into the ordinary decision‑making criteria that you'd expect for critical minerals," Ms King said. 

“So we've had to take the step and make sure we use my discretion, that I made sure I had as resources minister when I updated how the Critical Minerals List would be formulated, so on any given day I can work with how that list can change.

“That's what I've done.”

Ms King said critical minerals status was just one step that needed to be taken alongside industry.

"I don't want anyone to think that I think this is the magic carpet that gets us there," she said.

"Like there does need to be more done, and we need to work with Industry to make that happen."

Ms King also said she had been progressing “important discussions with international counterparts” in US, Canada and EU to ensure the high standards applied in Australian mining and production of nickel and other critical minerals are reflected in future pricing on international markets.

“Australian nickel producers must be able to compete fairly in international markets,” today’s announcement read.

“We are determined to make this happen. When the playing field is fair, Australian resources stand a fair chance.”

Today's news was welcomed by the Association of Mining and Exploration Companies, with chief executive Warren Pearce praising government for the move. 

"It is pleasing to see both state and federal governments coming together to find bespoke measures that support projects still in operation, and those already in care and maintenance," Mr Pearce said.

But the Chamber of Minerals and Energy of Western Australia said more needed to be done to secure the future of the state's nickel sector. 

CME chief executive Rebecca Tomkinson said the organisation had long advocated for nickel to be added to the critical minerals list, and called on government to do more. 

“Access for nickel projects to bid for financial support under the Critical Minerals Facility is welcome news,” she said. 

“However, we also need action from state and federal governments to deliver the settings required for a resilient and competitive critical minerals industry.

“These are measure we have long been calling for such as turnkey industrial land, investment in productive infrastructure and competitive fiscal settings.”