The Australian government will meet with nickel and lithium producers this week, as the ongoing price slump starts to intensify impacts in the country’s mining industry, Kallanish reports.

Oversupply and the concentration of supply chains have sent prices for nickel and lithium, two key battery raw materials, plummeting, the government says in a statement. To discuss the challenges and possible support measures, resources minister Madeleine King and Western Australian minister for mines, David Michael will meet with nickel and lithium producers.

The meeting in Perth on Thursday will include heads of resources companies and representatives of the Chamber of Minerals and Energy WA, Association of Mining and Exploration Companies, Minerals Council of Australia and other relevant unions.

The government says it is committed to working with the industry to support local companies in competing with cheaper and lower-grade products produced outside the country. 

Working alongside industry and experts, the government will develop an “urgent plan” to “ensure we can turn the world-leading reputation of our resources industry into an advantage in the international market for our local companies,” King notes.

“Fluctuations in the nickel and lithium markets are having an impact on our domestic minerals industry,” the minister adds. “Commodities traditionally go through natural and cyclical boom and bust cycles, but the potential prolonged impact this could have on Australia’s energy transition, local workforce and development of Australia’s minerals sector is a matter of great concern.”

Minister Michael believes that this is another reminder that the mining industry is subject to cyclical commodity price fluctuations and other market forces beyond its control. “I am confident that in the longer term, WA’s world-class nickel and lithium industries will survive and thrive as providers of responsibly and ethically sourced, high-quality products for the battery industry,” he says.

Several nickel and lithium producers in the country have suspended or are slowing operations amid the price downturn. Developer Liontown Resources, for instance, said Monday it is reviewing the planned expansion of its Kathleen Valley lithium project, as well as an AUD 760 million ($500.8m) debt facility, due to weak market conditions. 

Meanwhile, BHP has started a review of its Nickel West unit to evaluate options to mitigate the impacts of the sharp fall in nickel prices.