The Receivers and Managers of the Mallee Resources Group of Companies announced that the Avebury Nickel Mine site will close, citing a decline in nickel price as the cause.
Receivers and managers have been operating Avebury while looking for a long-term buyer.
However, the decline in the nickel price, largely attributable to the significant year-on-year expansion in Indonesian supply, has adversely impacted the sale process and motivation of interested parties.
The LME nickel price is currently approximately $15-16,000/t, more than 50 per cent lower than it was at the start of 2023.
As a consequence, and as seen in other nickel mining operations throughout Australia, the sustained low nickel market has made continuing to run the mine untenable in the current environment.
Mallee Resources Receiver, Scott Langdon, said the oversupply of low-quality nickel from Indonesia made the higher quality, but higher cost, ores from Australian mines uncompetitive.
“As a number of other Australian miners have recently experienced, without a structural change in the market to properly value low carbon, battery-grade nickel, local mine operations will continue to be disadvantaged compared to their competitors”.
Mr Langdon said that it is disappointing that despite interest from global participants, current market conditions have presented challenges to finding the right path for a sale at this point in time.
“These external factors left us with no other choice than transitioning to a care and maintenance program for Avebury.”
“We thank the Avebury workforce for their hard work and support throughout the receivership.”
Mr Langdon said the receivers and managers were finalising the plan for the transition of Avebury to care and maintenance and will be communicating it to employees and other stakeholders over coming days.