BHP Group, the world’s largest listed miner, is temporarily suspending its Nickel West operations and West Musgrave project in Western Australia, effective October. This decision comes amid a significant decline in nickel prices and an oversupply in the global market. BHP cites “substantial economic challenges” and the inability to overcome the market downturn as the primary reasons for the suspension.
Despite nickel prices recovering from three-year lows, they remain down over 25% compared to last year. The company will invest $300 million annually to support a potential restart by February 2027. The move reflects the broader challenges faced by Australia’s battery metal producers, including low prices and high costs. IGO, another Australian battery metals producer, also paused a study for a battery chemicals plant due to low nickel prices.
The suspension highlights the volatility and challenges within the nickel market. BHP’s decision underscores the global oversupply and the pressure faced by producers. The move could impact Australia’s efforts to develop a downstream battery chemicals industry. It signals a potential shift in BHP’s focus towards other commodities, although the company remains committed to a possible restart.