Dwindling commodity prices forced a struggling resources operation into receivership.
A near 42 per cent drop in nickel spot prices prompted Mallee Resources to transition its Avebury mine into care and maintenance.
The proponent had hoped KordaMentha partners Scott Langdon and Richard Tucker plus co-founder Mark Korda would sell the operation. However, more than three months passed without a successful transaction.
“Receivers and managers have been operating Avebury while looking for a long-term buyer. However, the decline in the nickel price largely attributable to the significant year-on-year expansion in Indonesian supply has adversely impacted the sale process and motivation of interested parties,” a Mallee spokesperson said in a public statement.
“The sustained low nickel market has made continuing to run the mine untenable in the current environment.”
Langdon blamed Indonesia’s oversupply of low-quality nickel for reducing the competitiveness of high quality Australian ore.
“Without a structural change in the market to properly value low carbon, battery-grade nickel, local mine operations will continue to be disadvantaged compared to their competitors,” he said.
An estimated 200 employees are expected to be impacted.
“We thank the Avebury workforce for their hard work and support throughout the receivership,” Langdon said.
The State Government has offered to support affected workers after reducing security deposits by $110,000, refunding $300,000 through a renewable energy target exemption and unsuccessfully granting an $800,000 emergency support package.