The Western Australian Government has moved to protect the nickel industry, with royalty relief set to support thousands of jobs across the state.
The relief also aims to support Western Australia’s vision of becoming a global battery minerals processing hub.
The Nickel Financial Assistance Program will offer local nickel producers a 50 per cent royalty rebate – starting from the March quarter 2024 – and will be available over an 18-month period through a new Nickel Financial Assistance Program.
The program aims to protect local jobs, and ensure Western Australia remains a battery metals powerhouse, despite headwinds currently being experienced by the industry.
The nickel rebate will be provided if the average price of nickel in concentrate is below USD$20,000 per tonne for a given quarter. The rebate will then be repayable by the companies in equal quarterly instalments over the following 24-months.
The Western Australian nickel industry has experienced extremely challenging global market conditions in recent times, which have prompted mine and processing plant suspensions and significantly impacted jobs.
These challenging conditions have been caused by a significant structural disruption to the global market prompted by a surge in lower cost supply from other countries coming onstream.
Companies will need to apply for financial assistance and provide details of their need for support – including information on their finances and projected economics, as well as steps taken to adjust to the current price environment and structural changes in the industry.
Western Australian Premier, Roger Cook, said, “The nickel industry supported almost 10,000 jobs, and generated sales of more than $5 billion last financial year.”
Mr Cook said the industry is also an essential component of Western Australia’s vision of becoming a global hub for the downstream processing of battery metals.
“Protecting local jobs is a key priority for my government, and we recognise retaining our value-add, critical minerals sector is a key part of our plan to diversify Western Australia, and set it up for future success.
“This is highlighted by our current work to refresh and update the government’s Future Battery and Critical Minerals Industries Strategy, which was established in 2019.”
Mr Cook said the Nickel Financial Assistance Program will support nickel producers in their hour of need, providing temporary assistance to help with the structural changes to the nickel industry.
Western Australian Treasurer, Rita Saffioti, said that the state’s nickel industry plays a huge role in Western Australia’s economy, and, more importantly, employs thousands of Western Australians.
“We’ve always made it clear that decarbonising and diversifying our economy is essential for our state’s future, and critical minerals will have an important role to play in that.
“That’s why we’re stepping in and providing this temporary and conditional assistance, to support the industry through this difficult period.”
Ms Saffioti said the relief is consistent with previous royalty assistance programs to assist lithium producers, and junior iron ore producers, to adjust to changing market conditions.
Western Australian Mines and Petroleum Minister, David Michael, said, “Our nickel miners are competing internationally with mining jurisdictions that have significantly lower environment, social, and governance standards.
“It’s important that they are supported to weather the storm of current market conditions, so they can be part of ongoing and future efforts to decarbonise the globe.”
Industry response
Chamber of Minerals and Energy of Western Australia’s (CME) Chief Executive Officer, Rebecca Tomkinson, said the Nickel Financial Assistance Program was a positive sign that the weeks of urgent discussions with state and federal ministers and parliamentarians on behalf of industry were productive.
Ms Tomkinson said the funding shows the state’s understanding of the importance of nickel to the critical minerals aspirations of downstream processing.
“Battery minerals represent a strategically important sector for the state and we need to ensure we have a solution for the short- and mid-term, as well as settings that ensure viability and sustainability in the longer term.”
