A nickel mine in southern Western Australia is set to close, with more than 300 jobs lost.
First Quantum Minerals confirmed on Monday that its Ravensthorpe Nickel Operation (RNO), 500km south-east of Perth, would be placed into care and maintenance.
In a statement, the Canadian company said about 330 roles would be “made redundant”.
The company cited lower nickel prices projected for the next few years and higher operating costs.
“It is anticipated all production will cease by late May, with various activities underway in the coming weeks to ensure a planned, safe wind-down of processing and other areas,” a First Quantum spokesperson said.
“Despite RNO’s best efforts to maintain operations … the site is incurring significant current and projected losses.”
The spokesperson said First Quantum acknowledged it’s decision would have a significant impact on its employees and their families.
“A smaller, dedicated care and maintenance team will be appointed from current RNO employees to ensure the site is safe and preserved for a future re-start.”
The company said it would continue to engage with the Ravensthorpe and Hopetoun communities, and pledged a “large proportion” of the care and maintenance team would continue to be locally based.
‘Like déjà vu’
Ravensthorpe Shire president Tom Major said the decision was a blow for the region.
“We were hopeful that it [the mine] might continue, but it’s going to hurt for those people,” he said.
Mr Major said the impact on the Hopetoun and Ravensthorpe communities would be significant.
“We’re a resilient community, but there’s going to be a significant number of people without jobs from this point on,” he said.
“That’s going to have an impact on sporting teams, community groups, small businesses like the bakery and the pub … all the moving parts that make your community tick.”
The announcement comes after the mine was previously closed in 2009 and 2017.
The 2017 closure cost 450 jobs, while the 2009 shutdown left 1,800 people out of work.
Mr Major said today’s announcement was “like déjà vu”.
“Each time our community learns and grows from it and becomes more resilient,” he said.
“I’ve got full confidence that we will weather the storm.”
Community impact
Hopetoun Primary School P&C president Karrina Smallman said the decision would be felt throughout the coastal town.
“I’m not sure on the numbers of students at this stage that will be affected, but I’m sure it will have some impact,” she said.
“It was certainly, you know, dramatic last time that the mine was closed down, it did impact the student numbers heavily.”
Ms Smallman, who is also manager of the local Community Resource Centre, said the tight-knit town would band together.
“It is a special place to live, regardless of the mining that goes on and the job losses,” she said.
First Quantum oversaw the previous closure in 2017, while former owner BHP shuttered the mine in 2009.
First Quantum’s move is the latest in a string of setbacks for Western Australia’s nickel miners, with projects in the Goldfields and Kimberley also winding back operations and cutting staff.
Canary in the coal mine
Mining analyst Tim Treadgold said the writing had been on the wall for First Quantum’s RNO for some time.
“Ravensthorpe was always one of the more likely mines to close, in a way. It’s surprising, it’s kept going as long as it has,” he said.
“It’s always been a high-cost and very marginal project since BHP built it a decade or more ago.
“This is just a predictable step in the history of a hard luck project.”
The closure will have flow-on effects for other operators in the region and Mr Treadgold says all eyes will now be on BHP’s Nickel West operation as to how the fallout will shape the sector.
“The big one yet to come is BHP,” he said.
“They’re hanging on [until] August to see if anything happens to the price.
“All other nickel producers in WA and producers around the world, those that have survived, will be saying, ‘Well thank goodness Ravensthorpe’s gone — now I might be able to hang in there.'”
While the sector traditionally experiences strong swings between high and low prices, analysts believe the current slump represents a broader structural shift, driven by cheaper sources of nickel from competitors in Indonesia.
It has prompted crisis meetings with local miners offers of state and federal government support, including a 50 per cent rebate on nickel royalties from the WA government.
That offer followed First Quantum’s announcement in February that it would scale back operations and BHP indicated it planned to shutter its entire nickel division.
Mr Treadgold said the subsidies amounted to a “bandaid fix’ and First Quantum said the support would not have impacted the company’s decision.
“While RNO was preparing an application for royalty relief, the completion of the process would not have made a fundamental difference to the company’s decision to move into care and maintenance,” a First Quantum spokesperson said.
Green Metal ‘absolute disaster’
Mr Treadgold said the closure would put the microscope over Australia’s plan to turn the country into a major player in the battery metal manufacturing market.
“What you’re looking at is the first real test of the whole critical metals argument, which governments in Australia have been pushing,” he said.
“It’s a fool’s errand to think we’re going to somehow become a green metal producer because the world wants green metal.
“It doesn’t — it wants cheap metal.
“So government funding of mining projects is going to end up as an absolute disaster.”
As for RNO employees, Mr Treadgold said hundreds of jobs would likely be lost and other operators would need to consider their long-term investment in the market.
“Any company that’s producing a commodity that’s losing money should close the doors right now,” he said.
“Sadly, it means time to get a job somewhere else and certainly not in the nickel industry.”
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