Junior nickel explorers keep the faith for clean supply

Australia's junior nickel explorers are upbeat even as market heavyweights beg for a government bailout with more than 1000 jobs already lost after a price slump.

"Now is the time to get set in the nickel sector," Ardea Resources CEO Andrew Penkethman told a mining conference on Tuesday.

He acknowledged headlines about mine closures and challenging project economics amid the rapid increase in China-dominated supply out of Indonesia.

But the longer-term view had not changed for unprecedented growth as electric vehicles and battery storage demand added to traditional stainless steel markets, Mr Penkethman said.

A state government spokesperson told AAP the nickel industry was "clearly experiencing significant headwinds" and discussions were "ongoing" about industry support and protecting Western Australian jobs.

"But we are confident in its longer-term future in WA, particularly as providers of responsibly-sourced, high-quality product for the battery industry," the spokesperson said.

Demand for an ethical and sustainable critical mineral supply chain has been reinforced by European laws, as well as the United States Inflation Reduction Act (IRA) that is bankrolling new production to break China's stranglehold.

"Australia is very much at the top of the list as a low-risk destination, and at the top of the Australian list is Western Australia," Mr Penkethman told the RIU Explorers Conference in Fremantle.

Ardea's nickel project is 70km northwest of the city of Kalgoorlie-Boulder in WA and close to rail and gas lines.

He confirmed Ardea was working to a March quarter deadline with partners Sumitomo Metal Mining and Mitsubishi Corporation on a final agreement, that would green light a fully funded definitive feasibility study (DFS).

"The nickel market's currently in surplus, but it is forecast to flip over to deficit and we will see increases in the nickel price."

Chalice Mining is sitting on one of the western world's biggest potential sources of nickel, copper, platinum and palladium 70km northeast of Perth.

Chalice CEO Alex Dorsch said they were remodelling the project to reduce the tonnes and focus on higher grades, and would add underground mining to last year's scoping study on bulk open pit mining.

The US IRA changed the game and "effectively necessitates a Western premium on battery metals" but commodity prices were obviously at cyclical lows, Mr Dorsch said.

But as the nickel price went down and mines closed, the market for refined ores known as sulphide concentrates was getting tighter and the terms Chalice was getting were going up, he said.

The slowing adoption rate of lithium battery EVs gave new relevance to palladium, which is needed for hybrid vehicles and conventional internal combustion vehicles, he added.

Hybrids typically have a palladium-based catalytic converter and a nickel, cobalt, and manganese or nickel, cobalt, and aluminium battery.

Leading nickel producers including significant employer BHP have warned that operating costs are rising and they are struggling to compete with Indonesia, where labour costs and environmental standards are lower.

Crisis talks have been held in recent weeks with state and federal government ministers, including WA Mines and Petroleum Minister David Michael.

Relief from paying state royalties is on the table and federal Resources Minister Madeleine King has pledged to fast-track work on production tax credits.

WA Premier Roger Cook attended a critical minerals roundtable last Friday as part of a planned strategy "refresh" for battery minerals.

License this article

What is AAPNews?

For the first time, Australian Associated Press is delivering news straight to the consumer.

No ads. No spin. News straight-up.

Not only do you get to enjoy high-quality news delivered straight to your desktop or device, you do so in the knowledge you are supporting media diversity in Australia.

AAP Is Australia’s only independent newswire service, free from political and commercial influence, producing fact-based public interest journalism across a range of topics including politics, courts, sport, finance and entertainment.

What is AAPNews?
The Morning Wire

Wake up to AAPNews’ morning news bulletin delivered straight to your inbox or mobile device, bringing you up to speed with all that has happened overnight at home and abroad, as well as setting you up what the day has in store.

AAPNews Morning Wire
AAPNews Breaking News
Breaking News

Be the first to know when major breaking news happens.

Notifications will be sent to your device whenever a big story breaks, ensuring you are never in the dark when the talking points happen.

Focused Content

Enjoy the best of AAP’s specialised Topics in Focus. AAP has reporters dedicated to bringing you hard news and feature content across a range of specialised topics including Environment, Agriculture, Future Economies, Arts and Refugee Issues.

AAPNews Focussed Content
Subscription Plans

Choose the plan that best fits your needs. AAPNews offers two basic subscriptions, all billed monthly.

Once you sign up, you will have seven days to test out the service before being billed.

AAPNews Full Access Plan
Full Access
  • Enjoy all that AAPNews has to offer
  • Access to breaking news notifications and bulletins
  • Includes access to all AAPNews’ specialised topics
Join Now
AAPNews Student Access Plan
Student Access
  • Gain access via a verified student email account
  • Enjoy all the benefits of the ‘Full Access’ plan at a reduced rate
  • Subscription renews each month
Join Now
AAPNews Annual Access Plan
Annual Access
  • All the benefits of the 'Full Access' subscription at a discounted rate
  • Subscription automatically renews after 12 months
Join Now

AAPNews also offers enterprise deals for businesses so you can provide an AAPNews account for your team, organisation or customers. Click here to contact AAP to sign-up your business today.

Download the app
Download AAPNews on the App StoreDownload AAPNews on the Google Play Store