BHP Group (NYSE:BHP) will temporarily suspend its Western Australian nickel operations amid a global oversupply of the battery metal, which has resulted in a decline in prices, it said on Thursday.
“Like others in the Australian nickel sector, we have not been able to overcome the substantial economic challenges driven by a global oversupply of nickel,” BHP Group (BHP) said in a statement.
The market surplus and lower prices anticipated to persist through the medium term “could not be countered by the welcome policy interventions” made by the Federal and State governments, the miner added.
Surplus global supply, driven primarily by a ramp-up in production from the world’s largest nickel producer Indonesia, has caused prices to slump, forcing production cuts, with some miners dropping projects altogether.
BHP Group (BHP) has also reduced around a quarter of the workers constructing its West Musgrave nickel and copper project in Western Australia. The miner has already flagged a A$2.5B impairment charge related to its struggling Western Australia nickel business.
Potentially relevant stocks include Vale (VALE), Rio Tinto (RIO), Glencore (OTCPK:GLCNF) (OTCPK:GLNCY), Anglo American (OTCQX:AAUKF) (OTCQX:NGLOY).