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Following Wyloo’s decision to place the Cassini, Long and Durkin nickel mines under care and maintenance, BHP has announced that it will pause part of its Kambalda processing operations in Western Australia.

Wyloo is a major supplier to BHP’s nickel concentrator in Kambalda, following its $760 million acquisition of Mincor Resources last year.

Wyloo’s decision to cease mining in Kambalda means that BHP can no longer operate parts of its Kambalda concentrator.

“The decision by Wyloo to suspend its operations means it will no longer be viable to continue operating parts of the Kambalda concentrator from mid-year,” BHP Nickel West asset president Jessica Farrell told the ABC.

“BHP will transition the Kambalda concentrator’s crushing, milling and flotation circuits into care and maintenance from June 2024.”

BHP’s decision is said to result in about half of the concentrator’s workforce losing their jobs by the middle of this year.

“We will work closely with our people to support them,” Farrell said.

The Sydney Morning Herald reported that the processing plant will continue to dry concentrate from other miners.

Farrell described Nickel West as a “complex business” that combines underground mining operations, third party supply, on-site smelting, downstream refining and a multi-stage supply.

“We are looking at a range of options to remain globally competitive in a very tough operating environment,” she said.

“Costs have risen sharply and continue to go up while prices have fallen as new supply comes into the market.”

BHP revealed in its latest operational review that it was evaluating options to “mitigate the impacts of the sharp fall in nickel prices”.

“The nickel industry is undergoing a number of structural changes and is at a cyclical low in realised pricing. Nickel West is not immune to these challenges,” the company said.

“Operations are being actively optimised, and options are being evaluated to mitigate the impacts of the sharp fall in nickel prices. Given the market conditions, a carrying value assessment of the group’s nickel assets is ongoing.”

BHP is not the only miner operating in Australia to make major changes in light of recent nickel price slumps.

Chalice Mining announced yesterday that it would reduce expenditure by 40 per cent, with its managing director and chief executive officer (CEO) Alex Dorsch saying the changes will provide “flexibility to navigate” current market conditions.

First Quantum Minerals has also scaled back operations at its Ravensthorpe nickel mine in WA.

Last month, Panoramic Resources and its subsidiaries PAN Transport and Savannah Nickel Mines entered voluntary administration, with its directors appointing administrators as a result of a continuous decline in nickel prices.

Around the same time, IGO paused construction of the mechanised materials handling system at its Cosmos nickel operation.

Despite nickel headwinds currently affecting Australian miners, not all appears to be dour.

Nickel is now one of six minerals on Australia’s new strategic materials list. The list identifies commodities that are essential for the energy transition but aren’t vulnerable enough to meet the critical minerals list criteria.

Less than a month after the release of the strategic minerals list, Federal Resources Minister Madeleine King voiced support for a ‘green nickel price premium’, which would differentiate between the Australian-produced nickel that follows strong environmental, social and governance (ESG) standards and the ‘dirty’ nickel produced in countries such as Indonesia.

The pricing structure has been backed by Andrew Forrest and Wyloo CEO Luca Giacovazzi.

With all the recent shake-ups, the future of Australian nickel is yet to be seen.