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Federal and WA governments unite to support nickel and lithium producers amid market challenges

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By Colin Hay - 
Federal Western Austrlia government pledge support mining industry nickel lithium weakness

The federal and Western Australia governments have vowed to support local nickel and lithium producers as price weakness continues to plague both sectors and impact projects.

Federal Minister for Resources Madeleine King and WA Minister for Mines David Michael have agreed to meet with nickel and lithium producers to discuss challenges facing the industry and to inform possible responses from government.

The ministers will sit down with heads of resources companies in Perth tomorrow.

Representatives from the Chamber of Minerals and Energy WA, Association of Mining and Exploration Companies, Minerals Council of Australia and relevant unions will also be in attendance.

The ministers noted that nickel is currently subject to an oversupply in the market that has resulted in lower prices, while lithium’s price volatility is due in part to the concentration of supply chains.

The scheduled round-tables will discuss these issues as part of efforts to more fully understand the challenges involved and will also consider possible steps to help Australian companies be more competitive in the global market.

“Fluctuations in the nickel and lithium markets are having an impact on our domestic minerals industry,” Minister King said.

“Lithium and nickel are both crucial to the energy transition as we decarbonise. The mining of these resources supports many local jobs.”

Iron ore and coal strong

Despite the current lithium and nickel chaos, business turnover for the mining industry actually rose 4.9% in November, the fourth consecutive monthly increase, according to new figures released by the Australian Bureau of Statistics (ABS).

ABS head of business statistics Robert Ewing said the recent rises in mining turnover were due to higher iron ore prices and renewed demand for coal.

However, mining saw the largest decrease on an annual basis at (-8.7%), ahead of electricity, gas, water and waste services (-3.9%) and transport, postal and warehousing (-2.7%).

General economy remains robust

In the broader economy, ten of 13 industries saw rises in business turnover in November.

“This included arts and recreation services (up 6.2%), retail trade and transport [and] postal and warehousing (both 1.0% gains), as retailers and parcel delivery businesses benefited from the Black Friday sales period,” according to the ABS.

Ten of the 13 industries included in the indicator also rose on a year-on-year basis.

Industries that saw the biggest annual rises were construction (15.2%), accommodation and food services (8.1%) and other services (7.8%).