BHP, the world’s largest listed miner, has announced the suspension of its Western Australia nickel operations from October 2024. 

The company says its decision is driven by a significant drop in nickel prices and an oversupply in the global market.

The suspension will affect the Nickel West operations and the West Musgrave project, with a review planned by February 2027.

BHP anticipates an underlying EBITDA loss of approximately US$300 million for the financial year ending June 30, 2024. 

The company's Western Australian nickel operations employ 3,000 people, with 1,600 frontline workers being offered alternative roles. 

BHP also committed to investing around AU$300 million annually post-transition to support a potential restart of the nickel business.

The decision follows a year in which Indonesia emerged as a significant nickel supplier, contributing to global oversupply. The transition away from nickel in certain battery types has also impacted demand. 

Despite these challenges, Slattery expressed optimism about nickel demand towards the end of the decade, anticipating a need for incremental investment beyond Indonesian contributions.

“The importance of nickel that can be produced with low greenhouse gas emissions is not fully recognised in prices at the moment,” Slattery stated, adding that BHP expects this to change.

The announcement has raised concerns about the future of the Australian nickel industry. 

The suspension will affect several small communities, including the towns of Leinster and Kambalda. BHP has pledged a AU$20 million community fund to support these towns, although local leaders express concerns about its sufficiency. 

Federal Resources Minister Madeline King acknowledged the factors leading to BHP’s decision as beyond government control, and also noted BHP did not access up to AU$4 billion of critical minerals funding offered by the Albanese government earlier this year.

WA Mines and Petroleum Minister David Michael says he is maintaining a positive outlook for nickel's medium to long-term prospects despite current price challenges. 

Prime Minister Anthony Albanese said that BHP would be held accountable for its promise to redeploy affected workers, reinforcing the government's support for the critical minerals sector as essential for national security and economic policy.