In response to a global nickel glut and stubbornly low nickel prices, BHP will suspend Nickel West operations and the development of a vast West Musgrave project in the centre of Australia.

Mining and processing operations at the Kwinana nickel refinery, Kalgoorlie nickel smelter and Mt Keith and Leinster operations in Western Australia and the development of the West Musgrave project will be on ice from October until at least 2027.

So what happens to the Northern Goldfields solar and battery storage project, touted as a game-changing renewable energy facility to replace diesel and gas-fired electricity?

Coming online in 2023, it was heralded as a big step towards BHP’s aim to decarbonise operations by 30 per cent by 2030.

It included a 27.4 megawatt solar farm at Mt Keith and a 10.7MW solar farm and 10.1MW battery at Leinster that were integrated into TransAlta’s Northern Goldfields power grid.

“It’s projects like these that are setting a global standard of what a modern mine looks like, with a big focus on the environment and reducing carbon emissions,” then WA minister for mines Bill Johnston said.

Obviously, BHP Nickel West’s power demand will drop in the Northern Goldfields region and coal will no longer be required to feed the nickel refinery near the outback mining city of Kalgoorlie-Boulder.

“However, there will be an ongoing requirement for power to the operations and town during the temporary suspension,” according to a BHP spokesman.

“Transalta will continue to operate the power assets, including maximising the output from the northern solar project, to keep emissions as low as possible.”

Still turning a healthy profit from iron ore, BHP has invested $4.4 billion in the loss-making Australian nickel business since 2020 in the expectation of production for the battery and electric vehicle market.

This covered Australia’s first nickel sulphate plant, building two new mines and the development of two solar farms and battery storage.

BHP’s takeover of copper-nickel developer OZ Minerals in 2023 included its plans for the world’s biggest renewable energy micro-grid, located at a remote site where WA, South Australia and the Northern Territory converge.

On Ngaanyatjarra Aboriginal Lands, some 1300km northeast of Perth and 1400km northwest of Adelaide, the nearest towns include the Indigenous communities of Jameson (Mantamaru), Blackstone (Papulankutja) and Warburton (Milyirrtjarra).

Infrastructure giants worked on concepts for the off-grid system to serve a 20,852-hectare development with the potential to transform one of the world’s most energy-intensive industries and open up a new economic zone.

A microgrid of solar and wind generation supported by a battery energy storage system and backup diesel generation, was to support “zero-carbon mining” by 2038.

(As reported by Renew Economy at the time, the plan was for around 60MW of solar and 90MW of wind, along with a sizeable battery, to provide at leat 80 per cent of the giant mine’s energy needs, and working towards 100 per cent with demand management).

There were plans to start production in a year or two with the nickel market expected to be facing shortages amid demand for battery metals.

“No other metals will have the same intensity of use as the world shifts to cleaner energy and electrification, electric vehicles, wind farms and solar panels,” OZ Minerals CEO Andrew Cole declared two years ago.

With two large open cut mines and a processing plant, engineers mapped out the latest technologies to reduce power needs but a glut of cheaper Indonesian nickel bankrolled by China scuppered those plans.

“The West Musgrave hybrid renewable power station will be suspended in line with the temporary suspension of the West Musgrave mine,” the BHP spokesman said.

The mine was expected to produce 35,000 tonnes of nickel and 41,000 tonnes of copper per annum over the first five years.

A spokeswoman for Energy Minister Chris Bowen says Future Made in Australia policies announced in the last budget will transform the economy and create jobs in new industries such as renewable hydrogen and solar manufacturing.

Proposed laws also support the mining of critical minerals needed for batteries, transport and communications.

While the federal government’s $20 billion Rewiring the Nation is charged with connecting communities outside of the national electricity market, transmission decisions are largely a matter for states and territories.

But there is no Musgrave transmission proposal to support the extraction and processing of the trove of nickel and copper.

AAP