BHP Nickel West has taken the decision to suspend part of its Kambalda operation from June due to a lack of ore supply. Wyloo, a key source of ore to BHP Nickel West’s nearby Kambalda concentrator, announced that it will suspend its mine operations (Cassini, Durkin and Long) in Western Australia from 31 May as a result of ongoing weakness in the nickel market.

The Kambalda concentrator is located 56km south of Kalgoorlie and processes ore and concentrate purchased from third parties. Concentrate is then processed at the Kalgoorlie smelter to produce nickel matte, which is further refined at Nickel West Kwinana into nickel powder and briquettes.

Wyloo has owned the Kambalda mines for less than a year, having acquired them from Mincor in mid-2023 in a deal worth A$760M (US$509M). The company is now calling for “structural change in nickel pricing that distinguishes between nickel products as well as their ESG credentials”. The development continues a difficult period for the Western Australian nickel sector. Panoramic Resources’ Savannah nickel mine operation in Western Australia was halted early in January, having gone into voluntary administration. Meanwhile, First Quantum Minerals (FQM) announced that its Ravensthorpe nickel and cobalt mine will be suspended for a period of up to two years resulting in a loss of a third of its 420-strong workforce. During this time, the company will process stockpiled material and produce less mixed hydroxide precipitate (MHP).

In light of the downturn, Federal Minister for Resources Madeleine King and Western Australian Minister for Mines David Michael agreed to meet with nickel and lithium producers to discuss challenges facing the industry and to inform possible responses from the government. The Australian nickel industry is not unique in struggling with the new low-price environment caused by the glut of low-cost, Indonesian material hitting the market. South32 revealed it was putting its Colombian Cerro Matoso operation on strategic review as its ferronickel currently exhibits a 29% discount to the LME price.

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