Forrest shuts nickel mines after prices crash

22nd January 2024 By: Bloomberg

Forrest shuts nickel mines after prices crash

Andrew Forrest

Wyloo Metals, the private nickel producer owned by billionaire Andrew Forrest, is shutting down its Western Australian mines due to a sharp slump in prices for the key transition metal.

The mines near Kambalda will go into care and maintenance from May 31, the company said in a statement on Monday.

Wyloo, which bought the mines only six months ago, informed BHP Group that it won’t be able to fulfill a nickel off-take agreement that’s due to expire at the end of 2025, a spokesperson added.

Prices for nickel — used to make stainless steel and EV batteries — have slumped in the past year, mainly driven by a flood of cheap supply from Indonesia that’s threatening to disrupt the industry. Earlier this month, First Quantum Minerals Ltd. said it will halt mining at its nickel and cobalt operation in Australia and cut a third of the workforce in response to weaker metal prices and higher costs.

The closure of Wyloo’s Kambalda mines comes after BHP, the world’s biggest miner, last week warned it could be forced to write down the value of its nickel to mitigate the crash in prices.

Wyloo, which owns assets in Canada and Australia, last year also entered into a joint venture agreement with with IGO to produce battery-ready materials at a plant near Perth. Despite the shutdown of the mines, it’s studying developing its own nickel concentrator in the Kambalda region, Wyloo said in the statement.