AUSTRALIA classified nickel as a “critical mineral” on Friday, opening the way for the crisis-hit industry to access billions of dollars in government support.

Australia wants to build a battery chemicals industry to reap more value from its mineral wealth, but the nickel sector is facing thousands of job cuts after a jump in Indonesian supply saw prices plunge 40 per cent in a year.

“The international nickel price is forecast to stay relatively low through 2024, and likely for several years to come until the surplus of nickel in the market is corrected,” Resources Minister Madeleine King said in a statement.

“In the meantime, this puts further Australian nickel operations at risk,” she said.

Placing nickel on the critical minerals list means companies in the industry will have access to financing under Australia’s A$4 billion (S$3.5 billion) Critical Minerals Facility and related grant programmes.

“When the playing field is fair, Australian resources stand a fair chance,” King added.

GET BT IN YOUR INBOX DAILY

Start and end each day with the latest news stories and analyses delivered straight to your inbox.

Sign UpVIEW ALL

The industry’s woes were highlighted on Thursday when BHP said that it was considering putting on care and maintenance its Nickel West division, for which it also announced a US$2.5 billion writedown.

The operations employ 3,000 people and the announcement comes on the back of several closures this year.

Australia’s nickel resources are produced to high environmental, social and governance (ESG) standards, meaning it offers more sustainable and ethical critical minerals than many competitors, King added.

Discussions have been progressing with counterparts in the US, Canada and the EU to “ensure the high standards applied in Australian mining and production of nickel and other critical minerals are reflected in future pricing on international markets,” she added.

Some Australian producers have been pushing for a “green premium” but so far that has not emerged as a requirement for buyers. REUTERS