As Australian nickel players face multiple headwinds, Wyloo will temporarily shut down the Western Australian nickel mines it obtained through its acquisition of Mincor Resources.
Owned by Andrew Forrest, Wyloo acquired Mincor in July 2023 for $760 million with the ambition to become an “integrated nickel producer”. The company currently employs more than 220 contractors and is a supplier to BHP’s nickel concentrator in Kambalda.
As reported by The Australian Financial Review, Wyloo has notified BHP that it will now put the Cassini, Long and Durkin mines into care and maintenance from May 31.
Wyloo plans to retain most of its 44 full-time staff members that worked at the Kambalda operations. It’s currently speaking with Forrest’s iron ore giant Fortescue to find alternative jobs for the 220 contractors.
Wyloo chief executive officer Luca Giacovazzi said the shutdowns did not mean the company was abandoning plans to build a nickel plant in Kwinana, WA.
“The decision to temporarily pause our operations in the current nickel market will allow us to develop and assess these options as we move towards our long-term strategy to mine and process nickel from our own facilities in Kambalda and Kwinana,” he said.
“Our priority is to support our people through this transition, and we will work with our contractor partner and Fortescue to explore potential job opportunities for impacted employees.”
The announcement comes after BHP revealed last week that it’s weighing up options to “mitigate the impacts of the sharp fall in nickel prices”.
Alongside Federal Resources Minister Madeleine King, Giacovazzi has voiced support of a ‘green price premium’, which would differentiate between the Australian-produced nickel that follows strong environmental, social and governance (ESG) standards and the ‘dirty’ nickel produced in Indonesia.
“The (London Metals Exchange) is awash with pollutive nickel, which is squeezing out clean nickel from Australian producers,” Giacovazzi said, as reported by AFR.
“We need to see structural change in nickel pricing that distinguishes between nickel products as well as their ESG credentials.”
Forrest echoed similar sentiments last July.
“Wyloo has targeted nickel sulphides as they are the greenest and cheapest option for battery manufacturing. They have the best economics, can be processed into battery grade nickel with the lowest environmental footprint and are fully recyclable,” he said.
“We are going to give the market a choice between clean nickel and dirty nickel.”
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