Western Australia's Nickel Sector: Care-and-Maintenance Decisions in 2024

How Indonesian Supply Changed the Equation

The structural problem for Australian nickel producers was not a demand collapse. Global nickel consumption continued growing through 2023 and 2024, driven primarily by stainless steel production and, to a lesser extent, battery-grade nickel sulphate demand. The problem was supply. Indonesia's rapid expansion of nickel pig iron (NPI) capacity, mostly using rotary kiln electric furnace (RKEF) technology fed by laterite ore, flooded the market with Class 2 nickel units at costs that Australian sulphide mines could not match.

LME nickel prices, which had spiked above US$30,000 per tonne in early 2022 (partly due to the short squeeze event that disrupted the exchange), settled into a range between US$15,000 and US$18,000 through most of 2024. For Western Australian operations mining underground sulphide deposits with all-in sustaining costs above US$16,000 per tonne, that price range left little or no operating margin. The World Bank commodity markets outlook documented the broader oversupply dynamics through this period.

Operations That Entered Care-and-Maintenance

By the end of 2024, at least four significant Western Australian nickel operations had formally announced production suspensions or entered care-and-maintenance. The announcements came through ASX filings with varying levels of detail about the decision-making process and the conditions under which restart might occur.

First Quantum Minerals: Ravensthorpe Nickel Operations

First Quantum's Ravensthorpe operation in the Goldfields-Esperance region had been one of Western Australia's larger nickel producers, processing laterite ore through a high-pressure acid leach (HPAL) circuit. In mid-2024, First Quantum announced it would place the operation into care-and-maintenance, citing sustained low nickel prices and the need to preserve the asset for a future restart. Their ASX filings disclosed that the care-and-maintenance programme would involve approximately A$30-40 million in annual holding costs, a figure that reflected the complexity of maintaining an HPAL processing circuit in a non-operational state.

The company did not specify a nickel price trigger for restart in their public announcements. Their quarterly reports noted that restart decisions would depend on "sustained improvement in market fundamentals," language that left considerable discretion to management without committing to a specific threshold.

BHP Nickel West: Partial Curtailment

BHP's Nickel West operations, the integrated mine-mill-smelt-refine chain spanning Mt Keith, Leinster, Kambalda, and the Kwinana refinery, did not enter full care-and-maintenance. However, BHP announced production curtailments at several of its WA nickel assets through 2024, reducing throughput at concentrators and deferring certain development activities. As a diversified major, BHP's disclosure came through their quarterly operational review rather than a standalone suspension announcement, which made the nickel-specific details somewhat harder to isolate.

The Kambalda concentrator, which processed ore from multiple third-party mines in the region, was particularly affected. Several smaller mining operations that fed ore into the Kambalda facility under toll milling arrangements also suspended production, creating a cascading effect across the local supply chain.

Western Areas and IGO: Forrestania and Cosmos

Following IGO's acquisition of Western Areas in 2022, the combined entity held the Forrestania nickel operation and the Cosmos nickel project. By 2024, IGO's quarterly filings showed that the Forrestania operation had been placed on reduced production rates, with the company directing its capital allocation toward other assets in its portfolio, particularly the Nova-Bollinger copper-nickel operation and its lithium interests at Greenbushes. The Cosmos project, a development-stage asset, continued through its study phase but with a revised timeline that pushed the earliest possible production decision further into the future.

What Quarterly Filings Revealed About Cash Burn

For operations in care-and-maintenance, the Appendix 5B quarterly cash flow statements became the primary window into how much it cost to keep these assets on life support. The data told a consistent story: holding costs were substantial but still lower than the operating losses that continued production would have generated.

Ravensthorpe's disclosed holding costs of A$30-40 million annually deserve context. The HPAL circuit requires ongoing chemical management, tailings facility maintenance, and environmental compliance spending that a conventional sulphide concentrator would not require at the same scale. Shutting down an HPAL plant completely and mothballing it would involve even higher restart costs and greater technical risk. Care-and-maintenance represented a middle path: expensive, but less expensive than either continued operation at a loss or a full shutdown with uncertain restart economics.

The Employee Retention Problem

One cost that rarely appeared clearly in the quarterly filings but consistently featured in management commentary was workforce retention. Nickel operations in regional Western Australia compete for skilled personnel with the gold, iron ore, and lithium sectors, all of which continued hiring through 2024. Companies entering care-and-maintenance faced the challenge of retaining enough experienced staff to restart operations when conditions improved, while simultaneously reducing headcount to manage cash burn. Several ASX announcements referenced "key personnel retention programmes" without disclosing the specific costs involved.

Restart Conditions: What Companies Disclosed

Across the care-and-maintenance announcements we reviewed, a notable pattern emerged: most companies were deliberately vague about restart triggers. Rather than naming a specific nickel price at which production would resume, announcements typically referenced "market fundamentals," "sustained price recovery," or "improvement in operating margins." This language preserved optionality but made it difficult for external observers to model when restarts might occur.

The exception was BHP, which in its investor briefings provided more granular commentary about the cost curve position of its Nickel West assets and the price levels at which different operations became marginal. Even BHP, however, stopped short of committing to specific restart price triggers in their public filings.

The nickel care-and-maintenance wave of 2024 revealed something that the lithium downturn did not: nickel operations, particularly those using HPAL processing, carry holding costs that make suspension expensive. The decision to enter care-and-maintenance is not simply a matter of stopping the plant and walking away.

Implications for the Sector

The care-and-maintenance decisions across WA's nickel sector through 2024 have implications that extend beyond the companies directly affected. For supply chain analysts, the suspensions reduced Australian nickel concentrate and refined nickel output at a time when geopolitical discussions about non-Russian, non-Indonesian nickel supply were gaining traction. For policy researchers, the suspensions raised questions about whether Australia's critical minerals strategy, which includes nickel on the government's Critical Minerals List, adequately accounts for the cost competitiveness challenges that domestic producers face against Indonesian supply.

Our quarterly reviews will continue tracking these operations through their care-and-maintenance period, documenting any restart announcements, further cost disclosures, or changes to holding arrangements as they appear in ASX filings.