Nickelâs plunging price has prompted the Australian government to add the metal to its critical minerals list.
Nickel is considered a key material for the electric vehicle (EV) battery and energy storage sectors, but demand for the metal is still primarily linked to the stainless steel industry.
Right now, global economic pressures are weighing on demand across the board. At the same time, the nickel market is experiencing a significant supply overhang from Indonesia, the Philippines and China. The prevailing supply/demand imbalance has been clearly reflected in nickel prices, which hit their lowest level in three years in mid-February.
Australia is the world’s sixth largest nickel producer, and this low-price environment is wreaking havoc on nickel mining in the country â it’s led to reduced or sidelined operations at six different nickel facilities in the country since December 2023, including First Quantumâs (TSX:FM,OTC Pink:FQVLF) Ravensthorpe nickel operation in Western Australia.
AU$4 billion Critical Minerals Facility
Friday’s (February 16) news that Australiaâs government has decided to add nickel to its critical minerals list has come as a welcomed relief to the countryâs nickel-mining space.
Nickelâs critical mineral status effectively opens the door to funding for nickel companies through the governmentâs A$4 billion Critical Minerals Facility, as well as grants such as the International Partnerships Program.
Speaking about the announcement over the radio, Western Australia Premier Roger Cook said, âWe have some levers around royalty relief and royalty rebates, and weâre looking at all options in terms of how we can support the industry.â
Nickel market participants have also responded positively to the government’s move.
âAdding nickel to the critical minerals list makes sense and signals the Commonwealth Government intentions to deliver financial support to an industry that is hurting badly,â commented Warren Pearce, CEO of the Association of Mining and Exploration Companies, which represents over 500 member companies from all around Australia.
âIt is pleasing to see both State and Federal Governments coming together to find bespoke measures that support projects still in operation, and those already in care and maintenance.â
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Securities Disclosure: I, Melissa Pistilli, hold no direct investment interest in any company mentioned in this article.
Image and article originally from investingnews.com. Read the original article here.