Government initiatives announced to boost nickel industry but critics say they’re not enough

Despite providing billions of dollars in potential support for Australia’s ailing nickel sector, governments at the state and national levels have been accused of not doing enough.

Over the weekend, the federal and Western Australian governments introduced new measures they hope will halt the potential shutdown of Australia’s world-leading nickel industry.

First off the mark was Australia’s Minister for Resources Madeleine King, who announced that nickel would be added to the nation’s critical minerals list, providing the sector with an opportunity to tap into the $4 billion Critical Minerals Facility and related grant initiatives such as the $40 million International Partnerships Program.

That move was quickly followed by the WA government’s decision to dramatically reduce nickel royalty levels.

Pointing the finger at Indonesia and China for creating the global market issues threatening the global nickel sector, minister King said the nickel industry faces substantial structural challenges that cannot be addressed overnight.

Speaking on ABC radio in Perth, Ms King said there has been an extraordinary flooding of the international nickel market out of Indonesia, funded through China.

“It’s extraordinary, the changes seen in this market in five years; […] we’ve gone from our near neighbour in Indonesia having virtually none of the market internationally to nearly 52%, I think it is, in five years.”

“The international nickel price is forecast to stay relatively low through 2024 and likely for several years to come until the surplus of nickel in the market is corrected.”

WA royalty relief

For its part, WA has announced a nickel assistance program that will deliver a 50% royalty rebate for 18 months when prices are below $US20,000 per tonne, repayable over 24 months.

WA premier Roger Cook said the nickel industry supported almost 10,000 jobs, and generated sales of more than $5b last financial year.

“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 WA and set it up for future success,” the premier said in unveiling the program.

“Our 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.”

CME says more needed

The Chamber of Minerals and Energy of WA (CME), however, says the moves are not enough.

CME chief executive officer Rebecca Tomkinson said the addition of nickel to the critical minerals list and the creation of the assistance program were positive steps but more actions are needed.

“The state government’s Nickel Financial Assistance Program is one of many measures needed on the path to net zero, so I look forward to seeing further strategies and actions that secure longevity in the sector.”

Ms Tomkinson said removing inefficient government processes and delivering competitive fiscal settings would be needed to attract investment in Australia’s battery and critical minerals industry and achieve 2030 and 2050 decarbonisation targets.

“As a nation and as a state, we can’t afford to approach the global energy transition like a snakes and ladders game,” she said.

“We have all the key people at the table, so now it’s about coordinating our efforts and we appreciate the State government acting on this.

“Collectively, the state and federal governments need to ladder up and act before prospects to advance the global energy transition slip away and WA loses opportunities that other countries will willingly seize.”