Nickel Snubbed from Australia’s Critical Mineral List: Developments

The Australian Nickel industry went for a tailspin when the Australian govt did not include it in the critical minerals list. Many supremos of the Nickel industry of companies like IGO (ASX: IGO), Wyloo and POSCO who have money invested in Nickel expressed disappointment towards this development. This exclusion also comes in the wake of a struggling Nickel sector in the country, First Quantum (ASX: QUR) and then POSCO’s Ravensthorpe mine already registered a $28 million loss, and Wyloo’s Mincor business also saw massive outflows.in cash. 

This happened as Indonesia sits on 50% supply of the metal’s global demand. Nickel being a powerful metal for batteries and EV manufacturing this decision has sent shockwaves to the players of the sector. Here is a broader look towards this development.

Nickel not Included in Critical Mineral List

The nickel market is seeing a drawn-out price slump as the supplies from Indonesia supersede demand, and it has affected Australian Miners severely. Apart from the known miners POSCO, GO, Quantum and Wyloo, there is a severe threat to Western Australian (WA) jobs that have been created by the industry. The industry’s leading names are losing money due to the concentration of nickel in a single nation. 

Metals in display
(Source: www.pexels.com)

Industry Experts Weigh in

Wyloo Resource’s Supremo, Luca Giovazzi, in a statement to Financial Review, expressed disappointment with the Australian Govt’s (Government) move and said that the Indonesian oversupply is costing jobs of common people in Western Australia, preemptive steps should be taken to take control of the market dynamics of this metal. This is also happening at a time when the domestic markets of Nickel in many nations have gone inward and are looking for production locally.

He also stated that Australia produces an (Investment Review Act) IRA-backed clean Nickel, and that position should be leveraged in Global supply chains. This will stop the labour, capital and producer from moving to countries like South Korea where the mining business is much more feasible to operate, with its tax-friendly assistance.

As per a piece on Proactive writers.com.au, the industry is asking for a reconsideration of this decision as they are also seeing this as a missed opportunity. The world is moving towards greener alternatives and Nickel and Copper are going to be the main elements that will power sustainable manufacturing of batteries etc. The community also reiterates that metals included in critical lists like arsenic, selenium and molybdenum, though important, still are not at the same level of importance as Nickel and Copper.

Govt includes Nickel in Strategic Mineral List

The government however does not denounce the possibility of Nickel as an important element or mineral, it has included it in the strategic mineral lists. It is the same as what the EU has done with this mineral. This list includes metals that have a future need but are not in threat now. 

As per an S&P Global Insights report, Minister of Resources Madeleine King said in a Dec 16 statement about the inclusion of minerals in the critical mineral list including fluorine, molybdenum, arsenic, selenium and tellurium. But Helium, an existing mineral, was removed from the list. He also reiterates that critical metals are those metals that are important for defence, technology and green energy, this stance seemed similar to the explanation provided by Australia’s other strategic partners.

Govt also came with a strategic mineral list which includes copper, nickel, aluminium, phosphorus, tin and zinc, with plans to build strategic centres around Australia to research them. Resources Minister King also reiterated these research stations at the outset will be supported by the Federal, State and Territorial governments. They will be transformed into critical production centres to disrupt the existing supply chain in terms of need. 

Minerals Research Institute of Western Australia (MRIWA) will provide reports on necessary zones for these minerals' digging and finding, the CEO Nicole Roocke says to S&P Global.

Shannon O'Rourke, Chief of Future Battery Minerals (ASX: FBM), however, expressed solidarity with the government stating that there are close to 94 naturally occurring elements and over half of them are in the critical mineral list. 

Amidst these recent events, it's crucial to note that Australia ranks second only to Indonesia in nickel production. Both Australia and Chile lead the copper production stats globally.

Man lifting hot metal
(Source: www.pexels.com)

Importance of Funding in the Nickel Industry

Being on the critical mineral list assists in terms of funding and that’s why key players protested the snub move. Upon learning about how the Govt wants to create hubs for nickel industrial production, many experts expressed their points of view on this development.

Nickel Search (ASX: NIS) MD Nichole Duncan said investment in the industry by Govt is paramount to working without pressure. If Funding comes from a private party they always sense control and authority as their right to exercise.

International Copper Association CEO, John Fennell states if a hub would mean faster approvals of regulations that would be a welcoming step in the right direction.

Critical Minerals Facility, Lefroy Exploration, MD Wade Johnson, focuses the attention on barring them from access to Critical Minerals which according to him will lead to them not being able to access any of the $4 billion funding facility, Developments like these can make industries look for other greener pastures, other places for better investment and market climate for Nickel Production.

Conclusion

The Nickel market has been seeing quite a downward spiral in terms of its pricing, putting competent markets of production such as Australia vulnerable. To top that sentiment Australian Govt did not include Nickel in its critical mineral list. Critical Minerals are accustomed to access funding from a $4 billion govt facility, all of this is happening with Indonesia’s increasing inventory of Nickel. Industry experts have weighed in and expressed their concerns over the matter.