$5.4b wipeout for nation’s biggest company

Billions of dollars have been wiped off the value of Australia’s biggest company- following months of similar announcements from rivals.

Mining giant BHP — Australia’s biggest company — has wiped billions off the estimated value of its nickel operations, as the firm struggles to compete with a flood of cheap shipments from neighbouring Indonesia.

The Anglo-Australian company said it was writing down its assets in Western Australia by about US$5.4 billion, citing “current market conditions”.

BHP announced a $5.4b wipeout of its nickel assets. Picture: William West/AFP

Nickel is essential to the manufacture of stainless steel and of batteries that are fuelling the world’s transition to greener energy.

Employees at BHP's nickel operations in Western Australia. Picture: Supplied

But the nickel market has been upended by a surge in exports from Indonesia -- enabled by massive Chinese investments and a revolution in refining techniques that allowed low-quality nickel to be used in batteries.

Prices have fallen about 40 percent in the past year alone, prompting many once-dominant firms to rethink projects or write down the value of their assets.

BHP announced it had written down $5.4 billion in assets. Picture: Supplied.

“The nickel industry is facing challenges and there has been a sharp fall in prices,” BHP said in a filing with the Australian Stock Exchange on Thursday.

“The supply of nickel from Indonesia significantly increased and the London Metals Exchange began accepting Indonesian-origin nickel products.” “These unfavourable operating conditions are expected to endure for a considerable time,” the firm added.

BHP rival Glencore recently announced that it was looking to offload its stake in a large nickel mine in New Caledonia