Factbox: Australia's nickel producers face writedowns amid supply glut

Panoramic Resources

16/02/2024 05:56

(Updates with BHP and Prony Resources)
       MELBOURNE, Feb 16 (Reuters) - Australia has classified
nickel as a "critical mineral" on Friday, allowing the
crisis-hit industry to access billions of dollars in government
support, as its prime minister prepared wider policy support for
the green energy industry.
    A sharp slide in nickel prices over the past year, driven by
a jump in Indonesian supply, has hit Australian nickel
producers, leading to mine closures, production cuts and
writedowns in recent months. 
    Australia is the world's fifth-biggest producer of mined and
refined nickel, with output led by BHP Group  BHP.AX .
    Following are moves by nickel producers and developers to
cope with the slump:
    
    * BHP, the world's biggest-listed miner, on Thursday flagged
a $2.5 billion impairment charge for its Nickel West operations.
The operations are now under review with the potential to be
placed on care and maintenance.
        BHP signed a deal to supply nickel to Tesla in 2021.
  
        * France 
    agreed
     to provide a 140-million-euro ($150.60 million) loan to New
Caledonian nickel producer Prony Resources on Friday. Prony
Resources is one of three nickel processors in the territory
that face insolvency with the other two being Glencore  GLEN.L 
co-owned Koniambo Nickel SAS, and SLN, in which Eramet  ERMT.PA 
has a majority stake.
    * Wyloo Metals, a private investment company owned by iron
ore billionaire Andrew Forrest, said in January it will put its
Australian Kambalda nickel operations on care and maintenance at
the end of May as a result of low nickel prices.
    * Diversified miner South32  S32.AX  said last month that it
had started a strategic review of its nickel operation Cerro
Matoso in Colombia to evaluate options to improve its
competitive position amid a sharp downturn in the nickel market.
    * Canada's First Quantum Minerals  FM.TO  said in January it
will cut jobs and production at its Ravensthorpe mine in
Australia due to a "significant" downturn in prices that it
expects to last three years.
    * Panoramic Resources  PAN.AX  went into voluntary
administration in December. In January, its administrators said
operations at its Savannah nickel project would be suspended as
the "prospect of achieving a near-term turnaround of operations
and finances is low". The project remains up for sale.
    * Battery materials producer IGO  IGO.AX  flagged in
December it expects to book a further impairment to its Cosmos
nickel project when it reports on Jan. 31, adding to an almost
A$1 billion writedown in the 2023 financial year.
    
    ($1 = 0.9296 euros)

 (Reporting by Melanie Burton, Himanshi Akhand and Aaditya
Govind Rao; Editing by Sonali Paul and Sherry Jacob-Phillips)
 ((melanie.burton@thomsonreuters.com Twitter: @MelanieMetals;
+613 9286 1421; Reuters Messaging:
melanie.burton.thomsonreuters.com@reuters.net))