BHP Group has announced a decision to temporarily suspend the Nickel West operations and West Musgrave project in Western Australia.
The decision comes as a response to the oversupply in the global nickel market and the sharp fall in forward consensus nickel prices, said the Australian mining and metals company.
During the suspension of nickel operations, BHP will invest about $300m annually. This will be made after the completion of a transition period to support a potential re-start of the nickel operations in Western Australia.
BHP plans to start the transition period from this month. The company’s Western Australian nickel operations will be winded down in October 2024.
The handover activities for the temporary suspension are expected to be completed by December this year. BHP intends to review its decision by February 2027.
As part of the temporary suspension plans, BHP will halt mining and processing operations at the Kwinana nickel refinery as well as the Kalgoorlie nickel smelter.
Operations at Mt Keith and Leinster and the development of the West Musgrave project will also be suspended.
Besides, BHP will implement a care and maintenance programme of work to ensure the ongoing safety and integrity of its mines and related infrastructure.
The company aims to continue to invest in exploration to extend the resource life of the Western Australian nickel operations.
BHP will also offer frontline employees at its Western Australian nickel operations another role within the company or the choice of a redundancy.
In addition, the company will establish a A$20m ($13.55m) community fund to support local communities during the temporary suspension.
BHP Australia president Geraldine Slattery said: “We understand this is a challenging period for the Western Australia Nickel team and surrounding communities.
“Every frontline employee will be offered another role within BHP, and best endeavours will also be made to identify redeployment opportunities for other employees engaged in the day-to-day operations of Western Australia Nickel.
“We will also work closely with local communities, Traditional Owners and suppliers to support a responsible transition process, which will include the establishment of a AU$20 million Community Fund.”
BHP has invested around $3bn to maintain Western Australian nickel operations since FY2020. This included developing a nickel sulphate plant to boost downstream infrastructure, building two new mines as well as investing in the development of two solar farms and battery storage.
