Thousands of Western Australian jobs are at risk as BHP shuts down its massive Nickel West operation.
It's a sign the state's nickel industry is hanging by a thread in the face of crashing prices, an expert warns.
BHP will close Nickel West, which includes the Kwinana Nickel refinery, the Kalgoorlie smelter and operations in Mt Keith and Leinster, along with West Musgrave.
"The transition period will commence from July 2024. Operations will be suspended in October 2024, and handover activities for temporary suspension will be completed by December 2024," BHP said, adding it would review the suspension by February 2027.
The mining giant blamed the decision on the global crash in the price of nickel.
"The decision to temporarily suspend Western Australia Nickel follows oversupply in the global nickel market. Forward consensus nickel prices over the next half of the decade have fallen sharply reflecting strong growth of alternative low-cost nickel supply," the company told the ASX.
More than 3000 workers are waiting nervously but voluntary redundancies are on offer and there's a promise for some.
"We've absolutely made a job guarantee to our frontline employees that anyone in our frontline who wants a job with BHP has a job with BHP," BHP Nickel West asset president Jessica Farrell said.
Business analyst Tim Treadgold said the decision showed the industry was "in very very serious trouble".
"It may well be a precursor to the closure of the entire industry," he said.
The price of nickel shot up when Russia invaded Ukraine, exceeding $US48,000 ($71,000) a tonne.
But it began trending down in 2023 when Indonesian nickel flooded the world market.
It's now trading at roughly $US17,000 a tonne and some forecasts see it dropping below $US15,000 next year.
"It's been a wild ride, it goes from extreme highs to extreme lows and now we're on an extreme low," Treadgold said.
It's an extreme blow for Premier Roger Cook's battery building ambitions.
"There's no way we were ever going to build batteries here and this has put an end to that dream," Treadgold said.
