First Quantum Minerals has announced Wednesday to suspend the Ravensthorpe nickel operation in WA's south-east after the metal used in stainless steel production missed a rally by everything from aluminum to zinc.
The Vancouver-based company, which employs close to 300 people according to the ABC, will place Ravensthorpe on care and maintenance next month at an estimated cost of $10 million, plus $5 million annually.
![Hundreds of jobs are on the line after news the Ravensthorpe nickel mine will shut down.](http://web.archive.org./web/20170812012046im_/https://www.fairfaxstatic.com.au/content/dam/images/g/x/t/0/0/b/image.related.articleLeadwide.620x349.gxszyd.png/1502317306719.jpg)
Restarting would cost about $10 million, it said in a statement. The company's shares lost as much as 4.4 percent in Toronto, the worst performance among peers.
"Ravensthorpe is an excellent operation with an outstanding workforce and supportive community but the continuing depressed nickel market conditions, over some years, leaves us no option," Chairman Philip Pascall said.
"Over the next few weeks we will work closely with our employees and key contractors to mitigate the impact and manage carefully the staged shutdown of operations.
"We will be offering assistance to employees in seeking further employment opportunities.
"We extend our sincere thanks to our entire workforce, local community, all levels of government and our partners in the mining sector who have assisted Ravensthorpe since its restart in 2011."
First Quantum bought the shuttered Ravensthorpe from BHP Billiton in 2009 for $340 million and restarted operations in 2011, a year in which nickel prices averaged about $22,865 a metric ton.
In the following years, commodity markets endured the biggest downturn in a generation as a slowdown in Chinese demand coincided with rising supply, leading to gluts.
While industrial metals such as copper and zinc have rallied more than 30 percent in the past year, nickel is little changed with prices averaging just $9,795 in 2017 as Indonesia lifted some restrictions on shipments, offsetting mine closures in the Philippines.
Other companies, including top producer Vale SA, are also reviewing their nickel operations.
With Ravensthorpe's capacity accounting for about 1 percent of global nickel supply, its suspension should be supportive for the market, Peter O'Connor, a Sydney-based analyst with Shaw and Partners, said in a note.
In late 2015, First Quantum was said to be working with Jefferies Group LLC to identify potential buyers for the mine.
Mines Minister Bill Johnston has told a The West Australian newspaper the decision was "very disappointing".
"The State Government asked First Quantum if there was anything that it could do to assist the mine through its issues, and was told there was not," he said.