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Federal Resources Minister Madeline King says she will put nickel on the critical minerals list, allowing nickel miners to apply to access a $4 billion fund.
The minister's announcement on Friday came after mining giant BHP revealed it was considering mothballing its Nickel West division, which could risk thousands of workers' jobs.
Ms King said the move would have "significant ramifications" on the state's nickel industry, with plummeting prices over the past year having already led to several mine closures and hundreds of job losses.
Loading..."If Nickel West went into care maintenance, which usually leads into permanent shutdowns, it would be very difficult to restart this industry, so it is a very serious moment," she told ABC Radio Perth.
Miners able to seek federal cash
Nickel's inclusion on the critical minerals list is expected to make it easier for project proponents to apply for funding from the federal government's critical minerals facility.
The loan facility, managed by the federal government's credit agency Export Finance Australia, aims to bolster and develop projects consistent with the Australian Critical Mineral's Strategy.
Last year, the facility's fund swelled from $2 billion to $4 billion.
"This will now make sure nickel can fall within that particular facility," Ms King said.
"The other thing it does is it helps with our international partners too that we move this onto the critical minerals list, so that we can attract some of their investment from their national financing bodies like Export-Import Bank."
The Association of Mining and Exploration Companies was among the lobby groups that called for nickel to be put on the critical minerals list earlier this year.
AMEC CEO Warren Pearce welcomed the move but said it was not yet clear if the support will be be enough for the struggling industry.
"I haven't got a crystal ball any more than anyone else has," he told ABC radio.
"The reality is we're in a situation that puts [us at] a critical point where the entire industry is at risk.
"If we lose the concentrator and the smelter ... getting these projects back off the ground and holding on to the value-adding components will be very, very difficult."
Inclusion a 'real folly', analyst says
Resource analyst Peter Strachan said it was a "real folly" to treat nickel as a critical mineral.
"What's critical about nickel is that they're critically in danger of going broke," he said.
Mr Strachan questioned the decision to allow the "failing" industry to have access to the critical minerals facility fund.
"How many times have you seen money lent to Australian businesses who then can't repay it?" he said.
"I think the government could find better ways to direct that that funding. We've already seen a lot of government funding being directed at, you know, white elephants."
The independent Perth-based analyst criticised big miners for pushing the industry to unsustainable levels over the past 12-18 months.
Ms King said the industry was in a very different position now than it was several months ago.
"If you make everything a priority, nothing's a priority," she said.
"So that's what I had to balance up and when we finalised the critical minerals list, nickel wasn't in this position.
"What I did make sure I could do, though, in developing this policy, was make sure I could very quickly move something from the strategic materials to the critical minerals list."
Crisis talks held
Last month Ms King held crisis talks with her WA counterpart David Michael, nickel producers, mining peak bodies and unions in Perth.
At the time, both Mr Micheal and Ms King said all proposals — from royalty relief to sweeping royalty reforms — were on the table to support the industry.
Neither could put a timeline on the plan of action but promised to fast-track it.
The meeting was prompted after hundreds of job losses and mine curtailments for WA's Ravensthorpe nickel operation and Kimberley nickel operator Panoramic Resources.
WA billionaire Andrew Forrest's Wyloo Metals was one of the biggest players to take a hit.
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