Canada and its allies are weighing taking action against China and Indonesia in the nickel market, as the two Asian countries tighten their collective grip in the critical mineral.
Indonesia has gone from supplying 7 per cent of the global supply of to 55 per cent in the past decade, with much of that new production controlled by China-based mining companies with ties to the authoritarian Beijing government. The glut of new global supply out of Indonesia has caused the steelmaking and battery metal commodity to plummet by more than 80 per cent from a peak of US$100,000 a tonne to around US$19,100 a tonne.
Speaking to media in Toronto after addressing the First Nations Major Projects Coalition conference, Ms. Freeland said a flood of cheap nickel is making the operations of western mining companies uneconomical and that the behaviour of the countries in control appears to be market manipulation.
“It is our belief that that behaviour can be intentional, can be happening with the purpose of driving companies in our country, [and] in those of our allies, out of business,” said Ms. Freeland. “That is not good for our economies. It’s not good for our national security. So Canada is very actively working both domestically on what we can do, and perhaps even more importantly, working energetically with our democratic partners to discuss collective responses.”
When asked if tariffs might be part of strategy Ms. Freeland said because the matter was so serious, it wouldn’t be appropriate to discuss the matter in public. “We are having productive conversations. We are in Canada, looking very carefully at ways that we can act as a country to defend our national economic interest,” she added.
The is putting tremendous pressure on large Western producers. Canada’s First Quantum Minerals Ltd., Switzerland’s Glencore PLC and Australia’s Wyloo Metals Pty Ltd. in the past few months have closed nickel mines, idled production and issued bleak forecasts. Earlier this year, Melbourne-based BHP Group Ltd., the world’s biggest mining company by market value, recently estimated that about half of all nickel production globally is money-losing, as the company incurred a US$2.5-billion impairment charge in its nickel business.
