MELBOURNE – Wyloo Metals, the private nickel producer owned by billionaire Andrew Forrest, is shutting down its Western Australian mines due to a sharp slump in prices for the key transition metal.

The mines near Kambalda will go into care and maintenance from May 31, the company said in a statement on Jan 22.

Wyloo, which bought the mines only six months ago, informed BHP Group that it will not be able to fulfil a nickel off-take agreement that is due to expire at the end of 2025, a spokesperson said.

Prices for nickel – used to make stainless steel and batteries for electric vehicles – have slumped in the past year, mainly driven by a flood of cheap supply from Indonesia that is threatening to disrupt the industry.

Earlier in January, First Quantum Minerals said it will halt mining at its nickel and cobalt operation in Australia and cut a third of its workforce in response to weaker metal prices and higher costs.

The closure of Wyloo’s Kambalda mines comes after BHP, the world’s biggest miner, last week warned that it could be forced to write down the value of its nickel to mitigate the crash in prices.

Wyloo, which owns assets in Canada and Australia, in 2023 entered into a joint venture agreement with IGO Limited to produce battery-ready materials at a plant near Perth. Despite the shutdown of the mines, it is studying developing its own nickel concentrator in the Kambalda region, Wyloo said in the statement. BLOOMBERG