The shutdown, scheduled to commence on May 31, comes just six months after Wyloo’s acquisition of the mining assets.
The company cited the challenging market conditions, attributing the decision to the sharp decline in nickel prices over the past year. Wyloo Metals conveyed its inability to fulfill a nickel off-take agreement with BHP Group Ltd., notifying the mining giant that the agreement, set to expire at the end of 2025, cannot be honored.
The nickel market has been adversely affected by an influx of inexpensive supply from Indonesia, posing a threat to the industry. This trend has prompted other mining entities to respond to the market dynamics. First Quantum Minerals Ltd., for instance, recently announced a suspension of mining activities at its nickel and cobalt operation in Australia, accompanied by a reduction in its workforce.
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Wyloo’s decision follows a warning from BHP, the world’s largest mining company, which indicated the possibility of a write-down in the value of its nickel assets to address the impact of the price crash.
Despite the closure of the Kambalda mines, Wyloo Metals remains active in the region. The company, which owns assets in both Canada and Australia, entered into a joint venture agreement with IGO Ltd. last year. The collaboration aims to produce battery-ready materials at a plant near Perth. Additionally, Wyloo is exploring the possibility of developing its own nickel concentrator in the Kambalda region, according to a statement from the company.
