Column: Australia gives nickel a quick fix, but surgery of global industry needed

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Australia is throwing a lifeline to its under pressure nickel mining sector, but the solution on offer is more of a band aid than the needed major surgery, the carving of the global nickel industry into green and dirty., a move that allows the industry to access some of the A$4 billion of federal government funding aimed at promoting minerals vital to energy transition.

Australia is the world’s fifth-largest producer of nickel ore and the recent decline in prices has rendered much of the industry unprofitable. That low was the weakest price since April 2021 and LME nickel has been in a sustained downtrend since reaching $33,575 a ton on Dec. 8, 2022. In other words, the greener nickel will need to command a price premium over the dirtier metal produced in Indonesia and turned into products like batteries in China.

This means that governments, particularly those in developed Western countries, will likely have to drive the change. The above quote is government-speak for setting up a system of regulation, taxation and carbon costs to drive up costs for Australia’s dirtier mining competitors and blunt China’s manufacturing heft.

 

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