Australia’s BHP mulls pausing nickel business amid low prices

BHP Group announced that some contractors at its West Musgrave nickel and copper project in Western Australia have left as the company considers pausing its nickel division due to low prices, Reuters reported on Monday.

The company has reduced the contractor workforce by about 25 per cent, affecting around 100 people. BHP is reassessing the project’s development timeline and capital spending.

The West Musgrave project, acquired from Oz Minerals by BHP last year, was estimated to cost A$1.7 billion to develop, with production expected in the second half of 2025.

BHP’s nickel business in Australia, which produces nickel sulphate for electric vehicles, is under review following a supply surge from Indonesia that has impacted prices. The division employs approximately 3,000 people.

BHP’s CFO David Lamont stated that the review of the nickel division was necessary due to operational losses, with significant market challenges.

CEO Mike Henry emphasised the company’s commitment to making a decision promptly regarding the division’s future. BHP flagged a $2.5 billion non-cash impairment charge related to the division in its recent financial results.

Henry highlighted the challenges of winding down the refining and smelting business, expressing concerns about Australia’s industrial relations laws.

He acknowledged positive government actions in Western Australia and South Australia to support the mining industry, including royalty relief for nickel miners.

BHP is engaging with policymakers to address industry issues and attract investment.