Thank you FRIK ELS for your feedback.

Hi Kenneth, this is another aspect of Indonesia’s long-running strategy of bringing mid and downstream industries onshore by banning exports of unprocessed ore and raw material to move up the value chain. Nickel pig iron is used by Chinese smelters for stainless steel production and is a low value export product. China’s Tsingshan has devised a process to turn NPI into battery grade nickel but it’s costly, energy intensive and decidedly environmentally unfriendly given coal is the primary energy source. BHP Nickel West’s competitive advantage is its green credentials but until such time as “clean” nickel attracts a price premium or nickel prices increase across the board, Australian nickel will have a tough time competing with Indonesia. That said if Indonesia is putting the brakes on mining and less material is available on the market it should provide some support for prices. However nickel is down sharply (–16%) from its May high and back below $18,000 a tonne which is not a conducive price and BHP would not have taken that huge write down and consider closing it down if they did not have a grim outlook for nickel.