Nickel prices fell 40% in the last year as Indonesian supply jumped, causing restructures and writedowns at nickel mines across Australia.
“This is an uncertain time for the Western Australia nickel industry and we are taking action to address the current market conditions,” BHP CEO Mike Henry said in the statement. “We are reducing operating costs at Western Australia Nickel and reviewing our capital plans for Nickel West and West Musgrave.”
BHP has indicated a non-cash impairment charge of approximately $2.5 billion against the carrying value of Western Australia Nickel, encompassing both the Nickel West operations and the West Musgrave project.
This impairment results in the reduction of Western Australia Nickel’s net operating assets carrying value to a negative $300 million, which includes closure and rehabilitation provisions totaling around $900 million.
Nickel West’s Kambalda concentrator will be placed into care and maintenance in June 2024 as Wyloo Metals, controlled by Australian billionaire Andrew Forrest, decided to suspend its Cassini and Northern Operations mines from May 31.
The Cassini and Northern Operations mines provide the majority of ore feed into the Kambalda concentrator and it will be no longer viable for Nickel West to continue operating the milling circuit after those mines cease operating.
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