First Quantum Minerals stops mining at Ravensthorpe, as nickel price plunges further
First Quantum Minerals will cease mining at its Ravensthorpe site in WA and process only stockpiled ore, with more than 100 people likely to lose their job.
The nickel price plunge has claimed a second victim, with First Quantum Minerals shutting down mining operations at Ravensthorpe in WA.
The company said on Monday it will continue to process stockpiled ore through its atmospheric leach circuit, but will switch off Ravensthorpe’s high pressure acid leach processing plant.
About a third of the company’s internal workforce of around 420 people are likely to lose their jobs as a result of the decision to switch off the high-pressure acid leach plant, with mining contractor MACA likely to redeploy its own workforce to other WA mines.
Ravensthorpe lost $US66m in the nine months to the end of September 2023, according to the company’s financial report for the September quarter — in which the mine booked a $US28m operating loss.
Since then the price of nickel has tumbled another 13 per cent to trade at about $US16,075 on the London Metal Exchange late last week. Nickel was worth almost double a year ago.
FQM’s decision comes only a week after the administrators of collapsed nickel miner, Panoramic Resources, halted mining at the company’s Savannah mine in the Kimberley region of WA, at the cost of about 140 jobs.
First Quantum said processing stockpiled ore means the company will still export about 16,000 tonnes a year of contained nickel from WA, down from previous guidance of 23,000 to 28,000 tonnes of contained nickel. Ravensthorpe’s nameplate capacity is about 30,000 tonnes of nickel a year.
Ravensthorpe general manager Scott Whitehead said the decision was aimed at ensuring the mine remains viable in the long term, with the company keeping on about 70 per cent of Ravensthorpe’s workforce.
“It’s important we position ourselves to respond in a timely manner to future
improvements in the nickel price by being able to reactivate our mining activities at
the preferred time,” he said.
First Quantum’s September quarter financial report also shows it was forced to pump in additional cash into the operation in the period, with part-owner POSCO accepting a dilution of its holdings in Ravensthorpe by electing not to take part in a capital raising.
The Korean heavyweight paid $US240m for a 30 per cent share in Ravensthorpe in 2021, handing over $US90m in cash and assuming $US150m of the operation’s loans. Since then Ravensthorpe has borrowed another $US28m to stay afloat, First Quantum’s financial statements show.
Ravensthorpe was built by BHP as the new centrepiece of its WA nickel division when the price was booming in the mid-2000s but was delivered years late and at a cost of $US2.1bn — more than twice its original budget.
BHP notoriously mothballed the nickel mine within months of its official opening, and First Quantum bought it for a bargain price of $US340m at the end of 2009, reopening the site in 2012.
Ravensthorpe has since been a regular victim of falling nickel prices and other mishaps at the complex and expensive high-pressure acid leach plant.
A structural failure of the mine’s acid leach tanks temporarily forced its closure in late 2014. Low nickel prices led to Ravensthorpe again being mothballed in late 2017.
Ravensthorpe returned to production in 2020, and has operated since then.
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