It has been dubbed the "white gold" of the energy transition, but in the past year the price of lithium has dropped by more than 80 per cent.
Meanwhile, nickel is down more than 40 per cent.
The plummeting prices have pushed WA's major industry players to mothball their mines, workers to lose jobs and the government to all but panic.
Both minerals are key components of batteries used in electric vehicles (EVs).
In Australia, EV sales more than doubled in 2023, according to the Federal Chamber of Automotive Industries.
What's behind the drastic downturn in stock prices?
It's not unusual for critical mineral markets to rapidly fluctuate.
Forecasts of huge demand lead to sudden price hikes that ultimately feed a surge in exploration and production.
Until there's a glut.
That has apparently been the case for lithium and nickel – the supply simply outgrew the rise in demand.
While the uptake of EVs is increasing, the pace has been slower than anticipated.
Indonesia's cheap nickel is also adding fuel to fire.
The nation's ban on nickel ore export in 2020 led to investment pouring into its domestic refineries.
Indonesia's low labour and environmental standards mean operational costs are much cheaper than Australia's – so local producers must sell their ethical credentials to compete with their South-East Asian rivals.
What's the fallout?
As with all boom-and-bust cycles, shareholders lose money and workers lose their jobs.
Last week the world's largest lithium producer, Albemarle, said it would cut jobs and scale back an expansion of its Bunbury refinery in WA's south to reduce costs and optimise cash flow.
The announcement followed job losses and mine curtailments for WA's Ravensthorpe nickel operation and Kimberley nickel operator Panoramic Resources, and the suspension of Core Lithium's mines in the NT.
WA billionaire Andrew Forrest's Wyloo Metals was one of the biggest players to take a hit.
The company revealed it would cease nickel mining in Kambalda, triggering BHP Nickel West to shut down part of its processing operations nearby.
What comes next?
WA Premier Roger Cook urged calm on Thursday.
"Obviously these are stressful times for the industry," he said.
"It's important that we sit down with them, understand their concerns and assist where we can."
Federal Resources Minister Madeleine King held crisis talks with her WA counterpart David Michael, nickel and lithium producers, mining peak bodies and unions in Perth on Thursday.
Both Mr Micheal and Ms King said all proposals — from royalty relief to sweeping royalty reforms — were on the table to support the industries.
Mr Michael flagged short-term relief could be on the cards in the form of payment deferrals, but could not provide details on what would trigger repayments.
"In terms of relief, I'm hoping to get some options at least for government to look at and to look at what impact they would make [for] those mining operations that currently are teetering on the price point," he said.
Meanwhile, Ms King said she would also take a proposed production tax credit — designed to encourage processing of minerals onshore — to treasury to be costed.
Neither could put a timeline on the plan of action but promised to fast-track it.
Why should you care?
In 2018, the WA government brokered a deal for mining giant Mineral Resources to acquire the Koolyanobbing iron ore mine, near Southern Cross, from US miner Cleveland-Cliffs.
At the time, the government said foregoing five years of state royalties would help save hundreds of jobs.
The price of iron ore was not factored into the deal.
Three years later, in 2021, WA's Mines Minister Bill Johnston revealed this relief saw the state miss out on more than $150 million in mining royalties.
Now, more miners are knocking at the government's door.
It's hoped the bailout will not leave taxpayers out of pocket.
Editor's note: This story has been updated to make it clear the Albemarle expansion plans have been scaled back, rather than halted.
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