First Quantum Minerals Ltd. said it will halt mining at its nickel and cobalt operation in Australia and cut a third of the workforce in response to weaker metal prices and higher costs.
The Canadian mining company said the suspension at the Ravensthorpe Nickel Operation, located in Western Australia, reflects a three-year plan to stop mining activity at the site and produce nickel concentrate from existing stockpiles.
“The decision results from the significant downturn in the nickel price experienced during 2023, combined with currently higher operating costs in Western Australia, and a requirement to improve the financial viability of RNO at current nickel prices,” the company’s Australian unit said in a statement on Monday.
The new operating model would allow the plant to continue producing and exporting nickel from stockpiles, while the company would be able to resume mining activities when prices improved, it said.
Nickel dropped 45% last year, weighed down by a flood of cheap supply from Indonesia, where new techniques to produce battery-grade material are threatening to disrupt the industry. The plunge across battery metals has forced mining companies to stall projects, abandon deals and scramble for cash.
First Quantum is also facing pressure to cut costs following orders from Panama’s government to permanently shutter its flagship copper mine, Cobre Panama, which generated 78% of the company’s operating profit in the first nine months of last year. The company initiated a process to sell a copper mine in Spain in December after Panama’s sudden directives left the company facing financial uncertainty.
The suspension of mining will reduce the facility’s direct workforce by approximately 30%, with contractors to be redeployed by their employers, the company said.