The company has come under increasing pressure amid this year’s sliding nickel price.

Australian miner Panoramic Resources (Panoramic) voluntarily went into administration as it could not find partnerships or secure funding for itself or its Savannah nickel operation in Australia. In November, Panoramic engaged Treadstone Resource Partners to conduct a strategic review process to evaluate options for the business or its operation, considering ongoing capital requirements factoring in future nickel price developments. However, this process was reported to be unsuccessful in the allotted time according to the Administrators FTI Consulting, which reportedly will now undertake a strategy to either sell or recapitalise Panoramic’s business. While Panoramic remains under administration, its listed securities on the ASX will be suspended.

Savannah is an underground mine, located in Halls Creek, in the Kimberley region of Western Australia, where ore is processed at its plant on site to produce a Ni-Cu-Co concentrate.

The operation has had a chequered history, operating intermittently over the past decade. It was initially placed on indefinite care & maintenance in 2016, as a result of a downturn in nickel prices. By July 2018, Panoramic announced it would restart operations, based on improved nickel prices and an offtake agreement with Jinchuan Group in China. However, in April 2020, the mine was once again placed on care & maintenance due to the disruption caused by the outbreak of the pandemic.

By April 2021, Panoramic entered into a new five-year offtake agreement with Trafigura, which commenced in February 2023, following the expiry of Panoramic’s offtake with Jinchuan Group after 20 years of supply.

Examining China’s nickel ore and concentrate imports, Australia makes up a relatively small proportion, accounting for less than 1% of the total. However, this also includes large volumes of laterite ore from the Philippines, New Caledonia, Ivory Coast and Guatemala destined for use in China’s nickel pig iron (NPI) industry. Australia is, however, the second largest supplier of sulphide concentrate after Russia, accounting for 35% of China’s imports during the first 10 months of 2023.

Given that China’s requirements for Class 1 nickel cannot be satisfied by domestic resources alone, Australia will continue to be an important supplier of sulphide concentrate. However, producers will continue to face headwinds owing to low (by recent standards) nickel prices and an oversupplied mixed hydroxide precipitate (MHP) market that is increasingly being used to produce Class I nickel products, deliverable on LME and ShFE exchanges.