The Australian Federal Government is expediting the implementation of production tax credits to assist the struggling nickel mining sector, with potential extension of support to lithium miners if required. Initially hesitant, the Albanese Government yielded to pressure from companies like BHP Group, who warned of possible closures and job losses. BHP’s indication of a potential shutdown of its entire nickel division in Western Australia, affecting around 3,000 workers, underscored the urgency of the situation.
Both the nickel and lithium industries are grappling with significant challenges, exacerbated by a sharp decline in nickel prices, currently at US$15,941.00. Since reaching a peak on January 3, 2023, nickel prices have plummeted by nearly 50%, placing immense strain on exploration and production firms.
Prime Minister Anthony Albanese’s visit to Perth for a cabinet meeting includes discussions on shoring up the nickel industry, which is crucial for Australia’s future, particularly in the context of clean energy endeavors.
“We are focusing on targeted, time-limited assistance that is tailored to address this short-term challenge in what remains a crucial industry for Australia in the long run,” Albanese informed reporters in Perth. “Nickel is poised to become a vital mineral in the future, particularly for battery technology and other applications, as the global economy shifts towards clean energy.”
In response to this potential crisis, the government has taken several steps, including designating nickel as a critical mineral and unveiling substantial support measures. These measures include a 50% royalty discount for nickel miners in Western Australia grappling with competitive pressures from overseas rivals. Additionally, industry advocates, led by the Association of Mining and Exploration Companies (AMEC), have proposed a 10% production tax credit initiative aimed at reducing costs and incentivizing investments in crucial mineral processing activities.
This initiative seeks to invigorate the Australian economy and foster job growth, supported by a comprehensive report that projects the advantages and drawbacks of implementing such a policy until 2035.