S&P GSCI NICKEL INDEX By Rhiannon Hoyle
BHP Group will shutter its Australian nickel operations later this year due to a global glut of the metal, one of the key ingredients in batteries for electric vehicles.
The world's biggest miner by market value said on Thursday it will suspend its Nickel West mining and processing operations, and the recently acquired West Musgrave project, in October.
The company intends to review the decision by February 2027, it said.
The global nickel market is facing a glut, said BHP. A big increase in low-cost supply has driven price forecasts for the rest of the decade sharply lower, it said.
BHP considered a sale of its Nickel West business as recently as 2019, but chose to retain it as expectations of a battery boom intensified. It has expanded the Australian operation to produce nickel sulfate, which is used in the lithium-ion batteries that power electric cars. BHP's Nickel West operation includes open-cut and underground mines, concentrators, a smelter and refinery in Western Australia.
BHP announced a review of its nickel arm in February and at the time said it would write-down the value of the business by roughly $3.5 billion before tax. It expects to record a further pre-tax impairment of roughly $300 million as a result of the suspension, the company said on Thursday.
"We have explored options to stem losses in the short-term and identify a viable path forward for the business," said Geraldine Slattery, the head of BHP's Australian operations. "Like others in the Australian nickel sector, we have not been able to overcome the substantial economic challenges driven by a global oversupply of nickel."
BHP said it will spend about $300 million a year on the operation to ensure it can be restarted again later if market conditions improve.
Write to Rhiannon Hoyle at rhiannon.hoyle@wsj.com
-0-
to Suspend Australian Nickel Operations Amid Glut of EV Metal - Update
By Rhiannon Hoyle BHP Group will shutter its Australian nickel operations later this year due to a global glut of the metal, one of the key ingredients in batteries for electric vehicles. The world's biggest miner by market value said on Thursday it will suspend its Nickel West mining and processing operations, and the recently acquired West Musgrave project, in October. The company intends to review the decision by February 2027, it said. The global nickel market is facing a glut, said BHP. A big increase in low-cost supply has driven price forecasts for the rest of the decade sharply lower, it said. BHP considered a sale of its Nickel West business as recently as 2019, but chose to retain it as expectations of a battery boom intensified. It has expanded the Australian operation to produce nickel sulfate, which is used in the lithium-ion batteries that power electric cars. BHP's Nickel West operation includes open-cut and underground mines, concentrators, a smelter and refinery in Western Australia. BHP announced a review of its nickel arm in February and at the time said it would write-down the value of the business by roughly $3.5 billion before tax. It expects to record a further pre-tax impairment of roughly $300 million as a result of the suspension, the company said on Thursday. "We have explored options to stem losses in the short-term and identify a viable path forward for the business," said Geraldine Slattery, the head of BHP's Australian operations. "Like others in the Australian nickel sector, we have not been able to overcome the substantial economic challenges driven by a global oversupply of nickel." BHP said it will spend about $300 million a year on the operation to ensure it can be restarted again later if market conditions improve. Write to Rhiannon Hoyle at rhiannon.hoyle@wsj.com -0-
Write to Rhiannon Hoyle at rhiannon.hoyle@wsj.com
(END) Dow Jones Newswires
07-11-24 0347ET
