Administrators of Panoramic Resources Ltd. announced on Tuesday the suspension of mining activities at the Australian company’s Savannah nickel mine in the Western part of the region as the prices for the metal declined further.
Mining at the Savannah mine is set to stop in the coming days, with around 140 employees expected to be laid off within Panoramic Resources. Over 200 jobs hired by contractors are also expected to be cut.
FTI Consulting, appointed as Panoramic administrator in December, oversaw the mine’s final delivery of nickel concentrate before it was temporarily shut down.
Nickel Price Slump Weighs on Panoramic
US-based FTI had planned to continue operations at the Savannah nickel project when they assumed the role last month to generate funds and settle debt and other liabilities.
However, nickel prices remained down as Indonesia-China-owned mines and processing facilities kept adding to the worldwide surplus of the metal.
Indonesia’s nickel output boom has led to prices for the metal being 45% higher in 2023. The country’s increased production has further weakened the possibility of a near-term rebound for the nickel industry.
Panoramic administrators stated that the slump in nickel prices remained despite mining activity carrying on, including the shipment of about 10,000 tons of nickel concentrate on January 3 of this year.
The company resumed operations at the Savannah mine in 2021 but faced hurdles the previous year when the metal’s prices halved, a crucial part of machinery encountered an issue, and harsh weather blocked a critical transport route.
The nickel’s benchmark price on the London Metals Exchange (LME) has dropped about $16,600 per ton after the metal was trading at more than $30,000 per ton in January 2023.
For 2024, the International Nickel Study Group (INSG) expects nickel supply to end above demand by 239,000.
Panoramic is exploring ways to maintain financial health. The mining firm has sought the assistance of Treadstone Resource Partners in considering several solutions, including a potential sale of its assets or recapitalization.
Such strategic alternatives focus on facing the current climate and ensuring a more secure future for Panoramic.
