Western Australia offers interest-free loans to revive nickel mines

Western Australia's government has allocated A$15 million for interest-free loans to help nickel miners in operation and support the potential restart of idled mines and ramp-up of new projects, it said in an April 1 statement.

The loans will be repayment-free until either July 1, 2028, or until nickel prices exceed $22,000/mt for two consecutive quarters. Interest-free repayments will be in quarterly installments over a two-year period following the conclusion of the interest-free period.

The loans are aimed at restarting and ramping up nickel mines that are still beset by challenges despite a recovery in sentiment for the base metal.

"The initiative aims to provide further confidence for the industry as sentiment and prices for the steel-making commodity and battery metal improve," said Minister for Mines David Michael in a statement.

"Our nickel miners are competing internationally with mining jurisdictions that have significantly lower environmental, social, and governance standards."

It is important, therefore, that they are supported to "weather the storm of current market conditions and get back to what they do best, so they can be part of ongoing and future efforts to decarbonize the globe," the statement said.

Nickel had been added to Australia's critical minerals list in February 2024 when Western Australia's government provided royalty relief for companies amid multi-year low prices. However, several companies still ended up shuttering their mines.

Western Australia was a top-five nickel producer globally in 2024, according to the state government. That year, the metal's prices crashed as Indonesia had flooded the market with product, and electric vehicle sales also missed expectations, as nickel demand growth hinged on increasing battery and steel usage.

The London Metal Exchange cash price has risen since the multi-year low of $13,874.98/metric ton in April 2025 to $16,916/mt on April 1, according to S&P Global Market Intelligence data. This was aided by Indonesia's Minister of Energy and Mineral Resources Bahlil Lahadalia confirming plans in December 2025 to cut the country's nickel production in 2026.

S&P Global Energy CERA upgraded its LME three-month nickel price forecast to average $17,146/mt in 2026, according to a March 30 note. The price is expected to decline to an average of $17,084/mt in 2027 before gradually rising to $18,500/mt by 2035, according to the note.

Significant headwinds

Luca Giacovazzi, CEO of Wyloo Pty. Ltd., said the assistance was a "welcome and practical show of support for an industry that has been doing it tough through a prolonged downturn in global prices."

"It comes at a critical time as we begin to see early signs of prices stabilizing," Giacovazzi told Platts, part of S&P Global Energy.

"We are actively working towards restarting our nickel operations in Kambalda, and initiatives like this provide added confidence for us to keep investing in preparation for the next phase of the cycle."

While also welcoming the support to restart nickel mines in the region, a Glencore PLC spokesperson told Platts that Murrin Murrin, which is still producing, "continues to face significant competitive headwinds with current global supply chain constraints exacerbating these impacts."

Murrin Murrin, Western Australia's biggest nickel mine, accounted for 35% of Western Australia's paid nickel mine production in 2024 and 82% of the state's paid cobalt mine production, according to the government.

The asset now accounts for a "vast majority" of Western Australia's nickel production, a state government spokesman told Platts. Murrin Murrin's total nickel metal output declined 6% to 32,100 mt in 2025 due to maintenance downtime, according to Glencore's full-year results in January.

"Glencore is continuing positive engagement with the [Western Australia Premier Roger] Cook government in relation to our Murrin Murrin nickel and cobalt operations in Western Australia," the company's spokesperson said.

BHP Group Ltd., which announced in August 2025 that it is considering selling its Western Australia Nickel business after suspending its Nickel West operations and West Musgrave mine in July 2024, declined to comment.

Nickel West's two largest mines, Mt Keith and Leinster, accounted for 33% of Western Australia's paid nickel mine production in 2024, according to the state government.

The value of Western Australia's nickel sales had fallen 44% to A$2.1 billion in 2024-25 as the­ average unit price of sales declined 11%, and the quantity of sales fell 37% to 87,927 mt, according to the state government.

Tough time lingers

Warren Pearce, CEO of the Association of Mining and Exploration Companies, said the government support was particularly welcome given that "it's still a tough time for the nickel industry."

"This initiative is a practical step that provides targeted support to nickel operators in Western Australia," Pearce told Platts.

"It recognizes the cyclical nature of commodities like nickel and the pressures currently facing operators. It should help support the ramp-up of existing operations and provide a pathway for restarting idled projects."

As the most recent addition to the critical minerals list, nickel "remains important for both steelmaking and battery technologies, and Western Australia has a clear opportunity to strengthen its position in global supply chains," Pearce said.

The support came after Australia's battery minerals industry was also backed up by the federal government, which introduced legislation changes on March 30 to enable Export Finance Australia to facilitate supply chain interventions for critical materials, including fuel.