Colin Barnett

Colin Barnett

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    Nickel industry goes from strength to strength

    17/10/2000 9:47 AM
     
    17/10/00

    Western Australia’s nickel industry is set to double in size over the next few years.

    In his opening address to the Australian Nickel Conference, Resources Development Minister Colin Barnett said sales figures recorded by WA’s nickel industry - which directly employs nearly 5,000 people - were valued at $1.8 billion in 1999-00, more than double the previous year’s total.

    “While sulphide based nickel ore formed the basis of WA’s nickel up to 1999, I believe the industry is now poised for strong and steady expansion based on the extensive lateritic nickel ore reserves found from Wiluna in the north to Ravensthorpe in the south,” Mr Barnett said.

    “The strong growth we have experienced in the last year is a result of recovering world nickel prices rising, decreasing world stocks and a sharp rise in demand for stainless steel and nickel alloys. But there has also been a fundamental change in the make-up of WA’s industry.

    “Ten years ago the volume of nickel production as metal or in concentrate was 48,000 tonnes produced by one company - WMC.

    “Today, we are the third biggest supplier of mined nickel in the world, after Russia and Canada, with about 12-13 per cent of world production or 143,000 tonnes in 1999-2000 produced by eight companies.

    “Today five companies have a capacity to produce 132,000 tpa of nickel in concentrate form, about half of which is processed into nickel metal at Kwinana.

    “Given the new projects and expansion plans on the drawing board, I believe this figure could rise to at least 150,000 tpa in the next four years.”

    Mr Barnett said good progress was being made in commissioning of first generation lateritic nickel mines in WA and in the development of second generation nickel mines here, and elsewhere in Australia and overseas.

    He said in 1999, the first three generation nickel laterite projects established a production capacity of 63,000 tpa, with actual production at about 40-50 per cent of capacity in mid 2000.

    The rolling expansion of two of the first generation lateritic projects - Murrin Murrin and Cawse, together with the new Ravensthorpe project, had the potential to add another 124,000 tpa production capacity in the lateritic nickel sector.

    Mr Barnett said that if the new projects and expansion plans currently in hand came to fruition, then annual production totals could more than double to more than 300,000 tonnes from 2005-06 onwards.

    This could lift WA into the position of being the largest producer of mined nickel in the world, accounting for as much as 25 per cent of expected world production in 2005.

    Mr Barnett highlighted the significant part played by the State Government’s initiatives in creating the right economic environment for growth.

    He said these included deregulation of the electricity and gas industries, construction of the Goldfields Gas Pipeline, improvements in road, rail and port infrastructure and services and policies that led to significant improvements in productivity and labour relations.

    However, the Minister warned there were many factors involved in successfully achieving this expansion.

    “The lateritic nickel producers have still to demonstrate the technical and economic advantages that their processing plants promised,” Mr Barnett said.

    ”Also, some of WA’s smaller sulphide producers will need to confirm access to more ore reserves so as to extend their operations beyond 2005.”

    The Minister said the successful development of this capacity would also depend on:
    • the prices paid internationally for nickel and cobalt;
    • the rate of development of new mines in eastern Australia, New Caledonia and Canada; and -
    • the improvements gained in the Russian nickel industry.

    Mr Barnett said it would also depend upon the extent to which the economies in Asia continued to grow and influence the demand for stainless steel, various nickel alloy-based products and nickel and cobalt based batteries.

    He said he believed that a strong Asian economy, and the formation of strategic alliances within the WA nickel industry, all boded well that these production capacity increases would be successfully realised.

    The State Government would continue to improve infrastructure and utility services used by the nickel industry to ensure that the State’s international cost competitiveness continued to improve.

    The nickel industry was a valuable export earner for Australia and contributor to the economies of State, particularly in remote communities such as the Goldfields Esperance region.

    Media contact: Diana Callander - 9222 9686