The nickel price crash and the road to recovery in Australia – by Annabel Cossins-Smith (Mining Technology – April 23, 2024)

Miners in Australia are feeling the brunt of the global nickel price crash, from mine closures to forecast reductions and government intervention. How did things get so bad and is recovery possible? Annabel Cossins-Smith investigates.

The global nickel market has been volatile for years now. The price rollercoaster of 2022 saw prices for the metal soar, plummet and then soar again in the space of eight months. This instability prompted the London Metal Exchange (LME) to suspend nickel trading altogether in March 2022, when global prices initially rallied more than 250% in one day, and later to begin “enhanced monitoring” of nickel to ensure trading activity was fair and to prevent market distortion.

More recently, the nickel market has experienced an unprecedented, drawn-out price slump that has put operations around the world – and particularly in Australia – in jeopardy. A significant oversupply of cheap, low-grade nickel pig iron (NPI) coming almost entirely from China and Indonesia, is the key cause of the price slump. Combined, the two countries produce around 70% of the world’s nickel. Indonesia alone accounted for roughly half of global production in 2023, which is expected to rise significantly by the end of the decade.

The surplus in global supply and subsequent price crash has caused miners to either reduce output at nickel mines, or to withdraw from or suspend operations entirely as they become unprofitable. So how can miners in Australia, whose operations have been worst hit by the crisis, recover, even as operations begin to close?

The situation in Australia: closures and cutbacks

The price surge in 2022 was largely due to concerns from producers that international trade would be dented by sanctions against Russia, a major producer of the metal, after its invasion of Ukraine in February of that year.

For the rest of this article: