Western Mines starts scoping study, tests at 5 mil mt Mulga Tank nickel project

Western Mines Group is initiating a scoping study and metallurgical tests for its Mulga Tank project, which it claims is Australia's largest nickel deposit with over 5 million metric tons of metal, aiming to achieve high recoveries and to become a low-cost nickel sulfide producer.

The Mulga Tank deposit is expected to become a strategic asset within three to five years, potentially rivaling or even surpassing Canada Nickel's Crawford deposit, Western Mines Managing Director Caedmon Marriott said during the International Mining and Resources Conference in Australia over Oct. 21-23.

The deposit contains about 5.3 million mt of nickel, including 1.6 million mt classified as indicated resource and between 3.5 million and 3.6 million mt as inferred. "That comfortably makes us the largest nickel deposit in Australia and very likely [among the] top 10, if not top five, in the world," he said.

Western Mines has invested $10 million in the project so far and has recently completed another funding round. "We are now well funded for the next six to 12 months," said Marriott.

Nickel market

The London Metal Exchange nickel three-month price has hovered between $15,000/mt and $15,500/mt for most of the second half of 2025 as of Oct. 21, down from $16,000-$17,000/mt during the same period a year earlier.

Western Mines said it remains optimistic about the metal, noting "a very firm floor in the pricing at $15,000/mt" and anticipating increased opportunities for Western Australia -- described as "a world-class nickel province" -- as mining in Indonesia, which accounts for 63% of the world's refined nickel output, gradually becomes costlier.

"The Indonesians have gone out and they have mined the high-grade first, the closest to infrastructure," said Marriott. "Over time, we see the cost base there going up as they become more ESG [environmental, social and governance] compliant, which I think is a big theme that they're starting to push."

Market participants at LME Week over Oct.13-17 also provided a positive outlook for nickel, attributing this to Indonesia's need for higher nickel prices to support its commitment to eliminating the fiscal shortfall and achieving a balanced budget within the next few years.

"The Indonesian government is looking at nickel as one of the solutions to the issue of its budget deficit [forecast at 2.48% of gross domestic product in 2026], and allowing the nickel price to go up is one way to attract more money," Jim Lennon, analyst at financial services group Macquarie, said during the LME Week.

Another approach is to encourage increased investment in developing domestic nickel end-user sectors, such as battery and electric vehicle manufacturing and stainless steel production -- areas that Indonesia is actively pursuing, according to participants at the LME Week. Enhanced downstream processing in the country could also contribute to a more balanced global market as a side effect.

Cost strategy

Marriott said Western Mines aims to position itself in the lower half of the nickel production cost curve. By working with sulfide ore, the company's operations are expected to be less CO2-intensive compared with metal extraction from laterite-type ore deposits, which are most common in Indonesia.

According to Marriott, the Western world is increasingly shifting toward low-grade disseminated nickel deposits, with Canada Nickel and its Crawford deposit leading this transition.

"These guys have put out a feasibility study on a 0.22% nickel ore body, demonstrating that all-in sustaining cost will be just less than $4,000/mt," he said. He added that Western Mines is about three years behind the Ontario-based open-pit mine project, but "hot on their heels."

Western Mines plans to release the results of its scoping study in 2026 to demonstrate the project's economics and the "superior ore body" of its Mulga Tank deposit, Marriott said.