The Albanese government is fast-tracking a system of production tax credits to try to protect the ailing nickel mining industry, and is prepared to extend the credits to lithium miners should the price of that critical mineral also continue to fall.

As Anthony Albanese arrived in Perth on Sunday for a cabinet meeting on Monday, sources said the development of tax credits, which was initially resisted by Treasury, was being “accelerated” via the budget process amid warnings from BHP and others that they may have to cease operations with the loss of thousands of jobs.