First Quantum to shut down Ravensthorpe nickel mine

Canadian miner First Quantum Minerals (TSX: FM) has decided to shut down its Ravensthorpe nickel operation in Western Australia.

The company halted production at the mine in January, saying at the time that the mine would be idled for at least two years. During that time, the company intended to process stockpiles well into 2025 and then consider resuming mining.

Difficulties in finding a sustainable financial model for Ravensthorpe, higher operation costs, and lower nickel price forecast for the next few years, have prompted First Quantum to make a more drastic decision.

“Despite our best efforts to maintain operations by transitioning to a new operating strategy that involved ceasing mining activities, processing stockpiles and altering its approach to production, the site is incurring significant current and projected losses,” First Quantum said in the statement.

The company said the decision to shut down the mine, with the process starting on May 1, was the best strategic move as it leaves the orebody intact for future value.

First Quantum estimates that around 330 positions will be eliminated when the mine ceases all operations this week. Major suppliers to the Ravensthorpe mine have been notified to allow them to prepare for the shutdown of activities at the site, the miner said.

The nickel operation is the largest employer in Ravensthorpe and nearby Hopetoun. 

The mine has always been viewed as relatively high cost operation, and was previously suspended in both 2009 and 2017. The closure in 2009 left 1,800 people unemployed, while the shutdown in 2017 resulted in the loss of 450 jobs.

Last year, it produced about 30,000 tonnes of nickel in mixed hydroxide precipitate, and close to 1,000 tonnes of cobalt. 

Prices for nickel, traditionally used in steelmaking and increasingly in the manufacturing of batteries, have been hovering around three-year lows, closing on Monday at $8.55 per pound.

The metal was the worst performer among the base metal complex on the London exchange and the Shanghai Futures Exchange in 2023, losing more than 40% of its value on both markets.