The Albanese Government is taking steps to support Western Australia's nickel miners facing difficulties, with potential backing through a new green industry initiative similar to that introduced in the US.
Resources Minister Madeleine King drove home that this did not mean the government would be bailing out speculators affected by an oversupply of nickel from Indonesia but that it was an effort to support the local industry.
The Western Australian Government has also introduced measures to assist the industry, including a temporary royalty deferral.
The move comes following BHP’s announcement that it will write off billions of dollars worth of nickel assets and that thousands of local jobs now stand on the line.
Nickel to go on critical minerals list
In a bid to shore up those jobs and protect sovereign capacity, King announced the inclusion of nickel in the government's critical minerals list on Friday.
This classification enables miners, including BHP (ASX:BHP), to access a $4 billion federal loan facility and foreign export credits from allied nations such as Japan and Korea.
Efforts to counteract the dominance of the London Metals Exchange, which has been criticised for not differentiating between ethically produced Australian nickel and lower-standard nickel from Indonesia, have seen the big guns, including US ambassador and former prime minister Kevin Rudd, brought into discussions with key industry players.
Prime Minister Anthony Albanese highlighted the government's commitment to becoming a renewable energy superpower, characterising the multi-billion-dollar industry scheme as a "think big" approach.
The initiative, much like the Infrastructure Act in Biden’s US, aims to support the transition from traditional industries, such as coal, to green energy technologies.
The urgency of government intervention was underscored by BHP's recent decision to consider the future of its Nickel West project, amid falling nickel prices and concerns over the sustainability of the industry.
But industry leaders say the government's response is too slow and question the delay in recognising nickel's critical status.
We need to step up: industry leader
Association of Mining and Exploration Companies CEO Warren Pearce says the Federal Government needs to be more ambitious as it drafts a rescue plan for Australia's troubled nickel sector.
He told the ABC: “What's happening around the world is governments are making major market interventions and putting billions if not trillions of dollars on the table.
“There's over 1,500 international interventions in the form of tax concessions, grants, royalty holidays that are making industries overseas much more competitive and that's pulling investment away from Australia to those countries.
“The most significant, of course, is the US Inflation Reduction Act, which will have a trillion dollars of incentives on the table, and that means that Australian projects are competing with projects in the US that have massive support from their government, while in Australia we're operating in the same condition we always have.
“I think what's particularly important here is we have to realise if we can't hold on to our existing value-adding industries, what chance do we really have of getting new industries up?”