From Nickel to Gold: The Transformation of Western Australia's Kambalda Mining Hub
Kambalda, Western Australia — A seismic shift is underway in the mining sector east of Perth. The nickel industry in Western Australia suffered a significant downturn in 2024, leading to the closure of three underground mines in the Kambalda region, located 630 kilometers east of Perth. This decline has coincided with a surge in the Australian dollar gold price, which rose from approximately A$4,000 per ounce to over A$7,000 earlier in 2025, currently standing at A$6,375.
Kambalda Nickel Industry: Historical Context and Current State
"The basic process, crush, grind, flotation, is exactly what's required to treat the Ravensthorpe ore."
— Paul Bennett, Managing Director, Medallion Metals
The Foster mine, a dormant facility since 1994 with its headframe standing over a 750-meter-deep shaft in Kambalda, currently has flooded underground workings. The mine is owned by Lunnon Metals, which had estimated a restart cost of up to A$60 million.
Lunnon Metals is named after driller Jack Lunnon, who discovered nickel near Kambalda on January 28, 1966. This discovery led to the development of Australia's nickel industry by Western Mining Corporation (WMC) and the establishment of the town of Kambalda. Over 60 years, Kambalda has produced more than 1.6 million tonnes of nickel from 24 mines, valued at over A$40 billion at current metal prices.
Industry Leaders Weigh In on the Downturn
Edmund Ainscough, managing director of Lunnon Metals, described the current state of the nickel industry as a "temporary pause," noting its cyclical nature. He stated that restarting operations depends more on market sentiment than on a substantial change in nickel prices.
Ainscough identified the potential sale of BHP's Kambalda nickel concentrator as a key "trigger point" for the sector. The concentrator was placed on care and maintenance in mid-2024 as BHP suspended its Nickel West business, which is now on the market. Ainscough reported that various companies in the Kambalda district collectively control approximately 600,000 tonnes of nickel requiring processing facilities.
Local Economic Impact
Long-time residents of Kambalda have experienced the cyclical nature of mining employment, including multiple retrenchments. The town's population, once approximately 5,000, is now about half, partly due to an increase in fly-in, fly-out (FIFO) workers. Residents attribute the support of the town's economy during the nickel downturn to record gold prices and the nearby St Ives gold camp.
Future Investment and Plans
Mining magnate Andrew Forrest's private company, Wyloo, completed a A$760 million acquisition of Kambalda nickel miner Mincor Resources in 2023. The mines were subsequently shut down six months later.
Zoran Seat, Wyloo's Kambalda asset president, confirmed that dewatering operations are ongoing to facilitate a future restart, though no specific timeline was provided. Wyloo is assessing options for the Kambalda concentrator, including potential acquisition or designing a new facility, with a 10 to 15-year outlook for the region. Seat highlighted nickel's increasing demand from batteries, electric vehicles, and the global energy transition as a positive future indicator.
Repurposing Nickel Plants for Gold Production
Three mothballed nickel concentrators in Western Australia are being retrofitted for gold production in response to elevated gold prices.
"Every man and his dog is putting through every stone that's got gold in it, so all the mills are full with the high gold prices."
— Grant Haywood, Managing Director, Maritana Minerals
Black Swan Concentrator
Maritana Minerals estimates a A$101 million retrofit. Commissioning is targeted for mid-2026. The site has been in care and maintenance since 2009. It is expected to support 60 jobs on site and 300 workers at feeding mines.
Lake Johnston Concentrator
Sold to Forrestania Resources for A$35 million. The refurbishment cost is A$58.5 million, with commissioning targeted for later in 2025.
Cosmic Boy Concentrator
Purchased by Medallion Metals. Modifications to treat gold ore from the Ravensthorpe project are underway, with first gold pour targeted for the first half of 2027. The project has a A$138 million budget.
Paul Bennett, managing director of Medallion Metals, explained the technical transition: "The basic process, crush, grind, flotation, is exactly what's required to treat the Ravensthorpe ore. There's just one additional step that we require, which is to leach the tail out the back end to recover the last 15 to 20 per cent of the gold content."
Royalties
Gold royalties (2.5% of production) are expected to generate A$1.1 billion for Western Australia in the current financial year, second only to iron ore (A$8.8 billion), and projected to rise to A$1.3 billion in 2026–27.