Nickel Boner Update, page-5731

Thanks. Yeah, I've read similar articles on my feeds around that topic over the past week or so.

Here's one that puts some numbers around it:
‘Temporary’ nickel tax breaks could cost $800k per worker
(https://www.a---f---r.com/companies/mining/temporary-nickel-tax-breaks-could-cost-800k-per-worker-20240228-p5f8hs)

$800k gross subsidy cost per job in the Ni sector through to 2035, which adjusts to 'only' $400k net cost per job after the extra tax revenue is considered. And that's only for the next 9 years. (Let the memes begin...)

Even though Ken Henry (BHP) is talking his own book (who doesn't?), I think his comments around the focus needing to be much more on the structural issues, rather than a 'sugar hit' (my term) of tax breaks seems pretty close to the mark.

The only time the Feds seem to get involved in talking about downstream value-adding in any meaningful way is when there's a crisis. That's not how you nation-build. In reality, though, I'm certain the expert advisors to policy-makers know this all too well and it just becomes a delicate political dance around managing the bleating voices leading into an election cycle.

What's playing out currently in AU Ni seems to me to be somewhat of a supercharged (fast-tracked) version of how it played for the Australian car manufacturing industry (i.e. losing it). And I cannot really fault that, given that we're a high-wage, highly regulated affluent country with a relatively small population (customer base). Export-driven mass manufacturing of final end-product doesn't really play to our strengths in an interconnected global economy. Sans a complete rethink of how our economy is fundamentally structured (won't happen), the best we can hope for, I think, is in going down the midstream value-add track that produces bulk product like battery precursor materials, etc. Basically like what BHP has done with Ni sulphate at Kwinana and Albemarle (at Kemerton) and IGO (at Kwinana) in their currently problem-riddled attempts to produce Li hydroxide. Ironically, Albemarle is importing Chinese expertise, in an attempt to iron-out the Kemerton problems.
PBT's previous proposal was interesting, I thought. Pity it couldn't get traction. That said, pCAM prices suffered too during 2023, which PBT/POS wouldn't have been immune to.

Even then, however, midstream production is no magic bullet. That output is still subject to the pricing economics around supply/demand, which have also taken a hit during the concurrent Ni and Li rout. So, when a midstream producer gets bitten by soft prices should they go running to the Feds for a handout?

Corporate welfare is a very slippery slope, imo. I'm with Ken Henry; the Feds should be thinking about getting the macro policy settings right, like wages and regulation. But who in Oz is going to support that?

The above might sound like a bit of a rant. It wasn't intended to be. Just jotting down some of my thoughts around the futility of material taxpayer handouts occurring during a cyclic low. (Although, in Ni's case, I think it's a secular low.)

I'm watching and waiting for BHP's eventual decision around its overall WA Ni ops. I'm pretty sure I know how they'll roll, but time will tell.