Davis Index: Market Intelligence for the Global Metals and Recycled Materials Markets

Australia-based Western Areas has further cut 2021 guidance for nickel owing to lower grades and operational hurdles at Forrestania mining unit in Western Australia in H1 FY2020-21 (June 2020 -July 2021).


The new operational guidance stands at 16,000 – 17,000mt of nickel concentrate for the rest of the fiscal. Previously, the company had set production guidance at 17,000 – 19,000mt, while the original guidance was 19,000-21,000mt. In FY2019-20, the company’s nickel concentrate production was 20,926mt. 


Western Areas’ production and sales was impact with lower grades and some output deferred until 2021-22 at the Flying Fox mine and dilution faced at the Spotted Quoll mine. Improvement is, however, expected from the mine in H2. Western Areas’ new mine, Odysseus is under development and is expected to deliver its first ore in the September quarter and the first concentrate is expected late 2022. 


The company remains positive on the outlook for nickel driven by strong fundamental demand over the medium and long-term. Robust growth in electric vehicle (EV) manufacturing and sales are expected to significantly boost nickel demand. The company noted that the increased use of high-nickel content batteries continues to gain momentum. 

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