Nickel is back!

I do wonder when the hell nickel is going to be back.



The tax credits would provide financial support to miners by allowing them to either reduce their tax bills or claim tax refunds.

On Sunday, Prime Minister Anthony Albanese described the proposed tax credit regime as “smart, targeted, time-limited support” and said the current crisis in the nickel sector was “a short-term issue for what is, in the long term, a very critical industry for Australia”.

But South32 boss Graham Kerr questions whether nickel is being hit with short-term, cyclical forces, and sees a more structural change.

Indonesian nickel production has ramped up quickly in the past in response to price increases, he says, but the difference this time is that the Indonesian mines have been able to rapidly deploy technology to convert the nickel they produce into high-quality, battery-grade material.

Kerr sees no reason for Indonesian producers to take their foot off the accelerator any time soon. And he doubts that nickel buyers – mainly battery producers and electric vehicle manufacturers struggling with a sudden drop in demand – will suddenly start to pay a so-called “green premium” for more sustainably produced nickel from Australia.

If industry dynamics are unlikely to change quickly, the government will face a quandary around its tax credit plan.

“I think if you’re going to have support, you’ll have to think about how long you will provide that support for,” Kerr says.

Sean K said:

I do wonder when the hell nickel is going to be back.

View attachment 171189

The tax credits would provide financial support to miners by allowing them to either reduce their tax bills or claim tax refunds.

On Sunday, Prime Minister Anthony Albanese described the proposed tax credit regime as “smart, targeted, time-limited support” and said the current crisis in the nickel sector was “a short-term issue for what is, in the long term, a very critical industry for Australia”.

But South32 boss Graham Kerr questions whether nickel is being hit with short-term, cyclical forces, and sees a more structural change.

Indonesian nickel production has ramped up quickly in the past in response to price increases, he says, but the difference this time is that the Indonesian mines have been able to rapidly deploy technology to convert the nickel they produce into high-quality, battery-grade material.

Kerr sees no reason for Indonesian producers to take their foot off the accelerator any time soon. And he doubts that nickel buyers – mainly battery producers and electric vehicle manufacturers struggling with a sudden drop in demand – will suddenly start to pay a so-called “green premium” for more sustainably produced nickel from Australia.

If industry dynamics are unlikely to change quickly, the government will face a quandary around its tax credit plan.

“I think if you’re going to have support, you’ll have to think about how long you will provide that support for,” Kerr says.

Click to expand...

I have to agree with that....

It's not even picking winners, but picking losers.

Sean K said:

I do wonder when the hell nickel is going to be back.
...

Click to expand...

Good afternoon @Sean K
Yes indeed so, great question... wouldn't be holding one's breath...

According to Dr Prakash, in an article published on 16/02/24 for Australian Institute of International Affairs, a carefully orchestrated Indonesian initiative with Chinese financial and technological backing commencing in 2014, has provided Indonesia with success in the added value of onshore Nickel supply chains.

Australian political appetite to help our industry, sadly, might just be too late, with recovery, certainly not a short-term proposition.


Have a very nice night.

Kind regards
rcw1

@Sean K it is going to affect all our minerals, that are only going to be competitive if there is a 'green clean' tax credit, as a high cost producer we are going to end up in a World of pain, if Europe decides to not give us a 'clean' tax break and put a taxes on Chinese funded materials.

From and article posted by @qldfrog :https://www.ft.com/content/f255f767-187e-4516-af05-3c6e507c5c07

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https://www.ft.com/content/f255f767-187e-4516-af05-3c6e507c5c07

Australian mining billionaire Andrew Forrest has slammed Germany for its U-turn against EU legislation that would punish companies for environmental and human rights abuses in their supply chains. Germany withdrew its support for the landmark Corporate Sustainability Due Diligence Directive earlier this month at the insistence of the pro-business Free Democrats (FDP), the smallest party in the country’s coalition government.
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“If you want to make sure that all your supply chains lead straight back to China, if you want to continue whingeing about it and wailing about it and doing nothing about it, then . . . don’t adopt the human rights corporate responsibility directive,” Forrest said, adding: “I could not be more stridently opposed to the view that [the directive] is bad for business.” Many in Brussels believe the law is doomed without the support of the EU’s biggest industrial power.

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The directive is intended to ensure that the largest EU companies report and take action on social, environmental and human rights abuses in their supply chains. It is one of the bloc’s most ambitious efforts to raise standards in countries outside the EU, as well as among its member states. But critics, including Germany’s biggest business lobby, say the proposed legislation places a huge burden on businesses and in many instances is unworkable.

sptrawler said:

@Sean K it is going to affect all our minerals, that are only going to be competitive if there is a 'green clean' tax credit, as a high cost producer we are going to end up in a World of pain, if Europe decides to not give us a 'clean' tax break and put a taxes on Chinese funded materials.

From and article posted by @qldfrog :https://www.ft.com/content/f255f767-187e-4516-af05-3c6e507c5c07

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https://www.ft.com/content/f255f767-187e-4516-af05-3c6e507c5c07

Australian mining billionaire Andrew Forrest has slammed Germany for its U-turn against EU legislation that would punish companies for environmental and human rights abuses in their supply chains. Germany withdrew its support for the landmark Corporate Sustainability Due Diligence Directive earlier this month at the insistence of the pro-business Free Democrats (FDP), the smallest party in the country’s coalition government.
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https://www.ft.com/content/f255f767-187e-4516-af05-3c6e507c5c07

“If you want to make sure that all your supply chains lead straight back to China, if you want to continue whingeing about it and wailing about it and doing nothing about it, then . . . don’t adopt the human rights corporate responsibility directive,” Forrest said, adding: “I could not be more stridently opposed to the view that [the directive] is bad for business.” Many in Brussels believe the law is doomed without the support of the EU’s biggest industrial power.

Please use the sharing tools found via the share button at the top or side of articles. Copying articles to share with others is a breach of FT.com T&Cs and Copyright Policy. Email licensing@ft.com to buy additional rights. Subscribers may share up to 10 or 20 articles per month using the gift article service. More information can be found here.
https://www.ft.com/content/f255f767-187e-4516-af05-3c6e507c5c07

The directive is intended to ensure that the largest EU companies report and take action on social, environmental and human rights abuses in their supply chains. It is one of the bloc’s most ambitious efforts to raise standards in countries outside the EU, as well as among its member states. But critics, including Germany’s biggest business lobby, say the proposed legislation places a huge burden on businesses and in many instances is unworkable.

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So nickel first, Iron ore next for all Australian based mining affected by net zero, and the whole range of taxation/crazy extra costs added etc.
What happened with nickel will happen with IO in Africa. As for coal, the Qld gov is making sure it is killed.
Germany economy was powered by cheap Russian gas, after the US had the pipes blown and boycotts, they moved to US gas, shipped which is 7 times more expensive and with no secured contract.7 times which is collapsing their economy.
So who is going to buy our virtuous nickel, IO for a premium?
The US? ROL
China?
Or India? Lol Stop it...lol
Maybe as @sptrawler suggests, our own new subsidized battery factories?
Which will produce green clean but expensive and outdated batteries, as we do not have the R&D ...
And who will buy the overpriced virtuous batteries?
Get the profit while you can on any Australian soil mining of common minerals.
just added:
rare resources like gold, rate earths, Uranium, etc will be less affected than plentiful geographically dispersed ones

It is starting to look like nickel is going on the backburner yet again, as it does so often, so I thought posting this will be a good springboard in the future when again "Nickel Is Back".

FRom the article:
BHP believes it's unlikely that its nickel operations will be profitable before the end of the decade, as the mining giant weighs up mothballing its Nickel West business after reporting its worst half-year profit result since 2016.

The mining company's pessimism for its nickel business in the short-term follows the release of its half-year earnings report on Tuesday, with its statutory profit slumping by 86 per cent to $1.4 billion — despite its half-year revenue rising by 6 per cent to $41.6 billion driven by higher prices for iron ore and copper.

Nickel was identified as a key area of growth for BHP last year, but last week confirmed it was reviewing its entire nickel operation — including closing Nickel West altogether, putting more than 3,000 jobs at risk.

But despite the loss against its nickel business and its impact on its half-yearly results, BHP chief executive Mike Henry said nickel has always paled in comparison to iron ore in the company's portfolio.

"What's happened in the past 12 months is we've seen a real surge in supply of nickel coming out of Indonesia, and that's taken everybody by surprise, it happened more quickly and at lower costs than what market participants were expecting.

"That surge in supply out of Indonesia [is] impacting the highest quality nickel that BHP produces called class one nickel.

"We think that's going to persist for a period of time, potentially until the end of this decade, at which time we'll see the market come back into balance and things will look more positive for nickel again."

Western Australia produces about 5 per cent of the global supply of nickel, which is mainly used to make stainless steel. While the cost of production is high, Western Australia produces one of the purest grades of the metal that makes it suitable to use in the production of batteries.

Despite this, nickel has been a loss-making business for BHP, and the plummeting price of the metal has been exacerbating those losses, Mr Henry said.

As a result, he said the mining giant is at a crossroads where it has to consider its options to prevent more severe losses until profitability returns as forecast by the end of the decade.

But the boss of Australia's biggest company — and the world's largest miner — would not be drawn on a timeline for when it would decide the way forward and provide certainty for thousands of employees.

During a briefing to investors on Tuesday morning, Mr Henry said a decision about the Nickel West business was still a few months away.

His comments came after nickel was added to the federal government's critical minerals list on Friday, allowing businesses to apply for a pool of funding, and the WA government delaying 50 per cent of royalty payments for 18 months to assist nickel miners.

and from the AFR ...

Nickel accounted for just 2.7 per cent of BHP’s revenue in the December half, but about 90 per cent of the questions chief executive Mike Henry took from journalists on Tuesday.

The interest is understandable given the crisis facing the nickel sector, where mines are being shut, jobs are being lost and the federal government is scrambling to try to come up with financial support.

....
Henry dutifully worked through the nickel questions, revealing several key points about BHP’s attitude to a business it has now placed under strategic review, and may well shut in the coming months.

..First, the nickel business is very small in the context of BHP’s giant empire.

Second, BHP believes the shift in the nickel sector’s dynamics – where prices have plunged due to an influx of high-grade nickel out of Indonesia – is structural, not cyclical.

Third, BHP understands why there is a push for temporary support for the sector via the federal government’s proposed tax credit system, but this was not BHP’s idea. And the credits might not be enough to save nickel operations that have already been closed.

Finally, and most importantly, the crisis in nickel emphasises Henry’s oft-made point that Australia does not have the same natural advantages in critical minerals as it does in bulk commodities like iron ore and coal.

If the government wants critical minerals production to flourish, Henry argues it needs stable and competitive policy settings – faster and smoother permitting and approvals, industrial relations policy that supports flexibility, and internationally competitive tax settings.

Henry has been an outspoken critic of the Albanese government’s industrial relations reforms, particularly the “same job, same pay” policy that directly threatens the miner’s operations services model, which has been described as an in-house contracting division designed for maximum flexibility.

But Henry’s broader point is that Australia needs to realise it is in a fight with other countries that are also trying to grab onto the critical minerals boom – and doing so, he says, in a more business-friendly way..
.

Dona Ferentes said:

and from the AFR ...

Nickel accounted for just 2.7 per cent of BHP’s revenue in the December half, but about 90 per cent of the questions chief executive Mike Henry took from journalists on Tuesday.

The interest is understandable given the crisis facing the nickel sector, where mines are being shut, jobs are being lost and the federal government is scrambling to try to come up with financial support.

....
Henry dutifully worked through the nickel questions, revealing several key points about BHP’s attitude to a business it has now placed under strategic review, and may well shut in the coming months.

..First, the nickel business is very small in the context of BHP’s giant empire.

Second, BHP believes the shift in the nickel sector’s dynamics – where prices have plunged due to an influx of high-grade nickel out of Indonesia – is structural, not cyclical.

Third, BHP understands why there is a push for temporary support for the sector via the federal government’s proposed tax credit system, but this was not BHP’s idea. And the credits might not be enough to save nickel operations that have already been closed.

Finally, and most importantly, the crisis in nickel emphasises Henry’s oft-made point that Australia does not have the same natural advantages in critical minerals as it does in bulk commodities like iron ore and coal.

If the government wants critical minerals production to flourish, Henry argues it needs stable and competitive policy settings – faster and smoother permitting and approvals, industrial relations policy that supports flexibility, and internationally competitive tax settings.

Henry has been an outspoken critic of the Albanese government’s industrial relations reforms, particularly the “same job, same pay” policy that directly threatens the miner’s operations services model, which has been described as an in-house contracting division designed for maximum flexibility.

But Henry’s broader point is that Australia needs to realise it is in a fight with other countries that are also trying to grab onto the critical minerals boom – and doing so, he says, in a more business-friendly way..
.

Click to expand...

A lot of need to tell it as is truth in the bhp statement, but also another big FU of bhp in Macro play: nickel going from will be a critical metal of the coming decades, to being doomed in 12 months.
I still stick to my belief that any big move by bhp should be taken as a let's go for a contrarian position.
So my investment in Woodside, S32 and whc.
If bhp sells it away. It is a buy

Indonesia to wipe out global nickel rivals, warns French miner Eramet chief South-east Asian country’s low-cost production of metal vital to electric cars has made traditional suppliers uncompetitive, says Christel Bories Eramet chief executive Christel Bories: “This part of the industry will either disappear or be subsidised by governments” window) Indonesia to wipe out global nickel rivals, warns French miner Eramet chief on whatsapp (opens in a new window)inbox. Indonesia’s low-cost nickel suppliers will wipe out rivals in the next few years, cementing the country as the world’s dominant producer of the metal vital to electric car batteries, the head of French miner Eramet has warned. The south-east Asian nation could end up accounting for more than three-quarters of the world’s highest class of pure nickel in five years from now, Christel Bories told the Financial Times, with radical consequences for competitors elsewhere.

qldfrog said:

Indonesia to wipe out global nickel rivals, warns French miner Eramet chief

South-east Asian country’s low-cost production of metal vital to electric cars has made traditional suppliers uncompetitive, says Christel Bories

www.ft.com

Indonesia to wipe out global nickel rivals, warns French miner Eramet chief South-east Asian country’s low-cost production of metal vital to electric cars has made traditional suppliers uncompetitive, says Christel Bories Eramet chief executive Christel Bories: “This part of the industry will either disappear or be subsidised by governments” window) Indonesia to wipe out global nickel rivals, warns French miner Eramet chief on whatsapp (opens in a new window)inbox. Indonesia’s low-cost nickel suppliers will wipe out rivals in the next few years, cementing the country as the world’s dominant producer of the metal vital to electric car batteries, the head of French miner Eramet has warned. The south-east Asian nation could end up accounting for more than three-quarters of the world’s highest class of pure nickel in five years from now, Christel Bories told the Financial Times, with radical consequences for competitors elsewhere.

Click to expand...

Not only that but they're releasing so much crap into their 18,000 island archipelago they're going to destroy my favourite dive sites. :-(

I wrote a paper recently on plastic waste in the ocean and China is the worst, Indonesian second.

Nickel has recovered from the 15000s into the 17000s but do we trust it? Just stabilising above 17000 would be a nice thing.

10 days later and it's more than stabilizing. Maybe?

The damage Indonesia is causing to the land environment, oceans, water and workers through their massive nickel mining project is immense. At what stage do countries/businesses refuse to buy the product ?

Cheap coal, cheap workers, Chinese money: Indonesia’s nickel success comes at a price=​

Jakarta hopes the industry is the ticket to becoming a developed nation. But there are fears the toll on the environment – and people’s lives – will be too high

• Get our morning and afternoon news emails, free app or daily news podcast

by Per Elinder Liljas

Thu 11 Apr 2024 11.04 AESTLast modified on Thu 11 Apr 2024 11.41 AEST


Standing chest-deep in the Molucca Sea, just outside the billowing smokestacks of the world’s largest nickel industry, Upin adjusts his mask and dives. Members of his people, the Bajau, have been known to stay underwater for more than 10 minutes but Upin resurfaces shortly. He hauls a rugged disc of metal over the side of his dugout canoe.
“Since the factories arrived, there has barely been any fish to catch,” he says and grimaces towards the opaque water.

“The ocean has become warmer and more polluted. It itches on my skin but I have no choice. Collecting scrap metal is the only way for me to survive.”
Nickel has upended life on the Indonesian islands of Sulawesi, Halmahera and Obi. Over a decade the region has gone from modest ore exporter to the world’s foremost refiner of the metal. A rural backwater has been catapulted into modernity.

basilio said:

The damage Indonesia is causing to the land environment, oceans, water and workers through their massive nickel mining project is immense. At what stage do countries/businesses refuse to buy the product ?

Click to expand...

Well as China is buying the Indonesian product, to make the renewable products we are buying off China, I guess the question is when do we refuse to buy the Chineseproduct.

Not soon I would think, we are buying Chinese EV's and Chinese grid batteries, being supplied by Chinese solar panels and last week we removed the import tafiff on Chinese wind generator towers, much to the disappointment of the Australian manufacturers.

So I wouldn't be holding my breath, if I were you.

sptrawler said:

Well as China is buying the Indonesian product, to make the renewable products we are buying off China, I guess the question is when do we refuse to buy the product.

Click to expand...

Very good point. I was thinking more broadly but the question of Chinese complicity in the damage caused by this mine needs to be asked.

basilio said:

Very good point. I was thinking more broadly but the question of Chinese complicity in the damage caused by this mine needs to be asked.

Click to expand...

Well we are lifting tariffs, to allow more Chinese imports, yet at the same time the Govt is saying we need to increase manufacturing.

It's all about the optics, we will be the cleanest third world country on the planet, but we will be able to stand proud.

Fortunately we have nice beaches and pretty good weather, so we will have no problems becoming the Chinese equivalent of the French Reunion Island.

So we should be ok, at the end of the day. Lol

basilio said:

The damage Indonesia is causing to the land environment, oceans, water and workers through their massive nickel mining project is immense. At what stage do countries/businesses refuse to buy the product ?

Cheap coal, cheap workers, Chinese money: Indonesia’s nickel success comes at a price=​

Jakarta hopes the industry is the ticket to becoming a developed nation. But there are fears the toll on the environment – and people’s lives – will be too high

• Get our morning and afternoon news emails, free app or daily news podcast

by Per Elinder Liljas

Thu 11 Apr 2024 11.04 AESTLast modified on Thu 11 Apr 2024 11.41 AEST


Standing chest-deep in the Molucca Sea, just outside the billowing smokestacks of the world’s largest nickel industry, Upin adjusts his mask and dives. Members of his people, the Bajau, have been known to stay underwater for more than 10 minutes but Upin resurfaces shortly. He hauls a rugged disc of metal over the side of his dugout canoe.
“Since the factories arrived, there has barely been any fish to catch,” he says and grimaces towards the opaque water.

“The ocean has become warmer and more polluted. It itches on my skin but I have no choice. Collecting scrap metal is the only way for me to survive.”
Nickel has upended life on the Indonesian islands of Sulawesi, Halmahera and Obi. Over a decade the region has gone from modest ore exporter to the world’s foremost refiner of the metal. A rural backwater has been catapulted into modernity.

Cheap coal, cheap workers, Chinese money: Indonesia’s nickel success comes at a price

Jakarta hopes the industry is the ticket to becoming a developed nation. But there are fears the toll on the environment – and people’s lives – will be too high

www.theguardian.com

Click to expand...

i hold ATM and NIC ,

the Indonesia government is fine with that as it value adds to the exports , employs more Indonesians ,and is part-owner of ATM

and more to the point it was a government initiative/policy to stop major conglomerates from stripping the resources bare and leaving the nation with little compensation ( like they do in South America and Africa )

it mightn't be pretty but is still a quantum leap above how other emerging nations are treated

( Australia could do the same , but we prefer pretty and life on the bread-line )

BTW was that disc of metal a left-over from WW2 .. more advanced nations helped Indonesia by turning it into a war zone

divs4ever said:

i hold ATM and NIC ,

the Indonesia government is fine with that as it value adds to the exports , employs more Indonesians ,and is part-owner of ATM

and more to the point it was a government initiative/policy to stop major conglomerates from stripping the resources bare and leaving the nation with little compensation ( like they do in South America and Africa )

it mightn't be pretty but is still a quantum leap above how other emerging nations are treated

( Australia could do the same , but we prefer pretty and life on the bread-line )

BTW was that disc of metal a left-over from WW2 .. more advanced nations helped Indonesia by turning it into a war zone

Click to expand...

Yes it is a bit strange, people are getting out of shape because China is exploiting Indonesia, to get cheap processed nickel, so that China can make more profit.
Isn't that what we started doing 40 years ago, when we sent all our manufacturing to China, so that we could increase our profits.
Karmas a bitch. Lol

sptrawler said:

Yes it is a bit strange, people are getting out of shape because China is exploiting Indonesia, to get cheap processed nickel, so that China can make more profit.
Isn't that what we started doing 40 years ago, when we sent all our manufacturing to China, so that we could increase our profits.
Karmas a bitch. Lol

Click to expand...

As for the environmental destruction my initial thoughts were,
well, it's the Indonesian govt allowing it to happen.

We also have to acknowledge that we know more about the impacts of environmental damage than we did 40 years ago, but Australia isn't the one to point the finger in this arena, just look at the problems they caused in PNG with Oct Teddi.

Second week of rioting and unrest in New Caledonia


It has also led to a sharp spike in the price of nickel, which has reached its highest level in nine months.

New Caledonia possesses an estimated 25 per cent of the world’s nickel resources and accounts for 6 per cent of global production of the metal, giving the territory a level of influence on industry that belies its size. “Anything that happens in New Caledonia is of interest to the nickel industry,” says Adrian Gardner, principal analyst for nickel markets at energy research firm Wood Mackenzie.

While New Caledonian nickel mines have been operational since 1888, their level of importance to France in particular has gone up in recent years...

New Caledonia’s two major nickel-processing facilities – known as Doniambo and Koniambo – account for nearly a quarter of the global supply used in ferronickel, an alloy that is one of the key materials used in stainless steel production.

“If you suddenly withdraw a quarter of the nickel required by the stainless steel industry just to stay the same, then you’ve got a mini-panic on your hands,” says Gardner. “So that is the real pressure point that New Caledonia has in terms of global nickel . "