MELBOURNE (Reuters) – Australia’s BHP Group will temporarily suspend its Nickel West operations and West Musgrave project from October, the miner said on Thursday, as it battles a slump in metal prices and global oversupply.
The world’s largest listed miner wants to review its decision to temporarily suspend its nickel operations in Western Australia by February 2027.
“We have failed to overcome the significant economic challenges resulting from a global nickel oversupply,” said Geraldine Slattery, president of BHP Australia.
BHP will invest approximately $300 million annually after a transition period to support a potential restart of the nickel operations.
Nickel prices have recovered from three-year lows of below $16,000 early this year, but are still down more than a quarter from a year ago.
Global nickel producers are under pressure as Indonesia emerges as a supply powerhouse and as nickel usage in batteries declines, sending the metal’s price down 40% in the past year to around $16,800 a tonne.
Australia is trying to develop a processing industry to add value to mineral resources such as copper, nickel and rare earths. These resources are essential for the transition from fossil fuels to the production of battery chemicals.
But producers face structural problems, such as low prices and high construction and labor costs.
Australian battery metals producer IGO also announced on Thursday that it has halted a study into developing a plant to produce basic battery chemicals due to low nickel prices.
BHP will publish its quarterly production report next Wednesday.
(Reporting by Melanie Burton in Melbourne and Rishav Chatterjee in Bengaluru; Editing by Subhranshu Sahu and Keith Weir)