BHP's decision to temporarily suspend its nickel operations in Western Australia due to changing market conditions will have a substantial impact on the workers and communities of Kwinana, Kambalda and Kalgoorlie.
The decision is disappointing. It's a hard day for workers and WA and it reflects the extreme volatility in global nickel markets.
Global nickel prices averaged more than US$25,000 a tonne in the 18 months from the start of 2022. It is now US$16,725 a tonne. This has put substantial pressure on BHP's Nickel West operations.
The Albanese Government worked with BHP and the broader nickel sector on policy responses that would support ongoing Australian nickel production.
We added nickel to the critical minerals list in February, making nickel projects eligible for consideration under the $4 billion critical minerals facility. We also announced the critical minerals production tax incentive in the May Budget.
However, it is clear that the scale of commercial difficulties Nickel West faces due to developments in global nickel markets has led to the temporary suspension announced by BHP today.
Our immediate concern is for the workers and communities impacted.
We welcome the commitments made by BHP to redeploy workers who wish to continue to work for the company and we welcome BHP's undertaking to continue to invest in Nickel West throughout the temporary suspension to enable a re-start when global nickel markets stabilise and improve.
We also welcome BHP's commitments to continue to support local supply chains and pay royalties to First Nations communities through the temporary suspension and work with the WA Government to continue to support skills and resource investment in future projects.
BHP will review the temporary suspension by February 2027.
