Struggling nickel companies have been granted access to billions of dollars in federal funding as prices are expected to remain low through 2024.

Federal Resources Minister Madeleine King announced on Friday that nickel has been added to the official Critical Minerals List, which brings preferential treatment and opens doors to international investment.

The move comes after six operating facilities, including major employer BHP, announced they were scaling back loss-making operations and mothballing processing plants and mines.

But the support falls short of producers’ calls for royalty relief, production credits and emergency funding.

King said placing nickel on the list means companies will have access to financing under the $4 billion Critical Minerals Facility and grant programs such as the $40 million International Partnerships Program.

But she said the nickel industry faces substantial structural challenges that cannot be addressed overnight.

“The international nickel price is forecast to stay relatively low through 2024, and likely for several years to come until the surplus of nickel in the market is corrected,” King said.

“In the meantime, this puts further Australian nickel operations at risk.”

King said she had been “progressing important discussions” with counterparts in the United States, Canada and Europe to ensure the high standards applied in Australian mining and production of nickel and other critical minerals are reflected in future pricing on international markets.

“Australian nickel producers must be able to compete fairly in international markets. We are determined to make this happen,” she said.

“When the playing field is fair, Australian resources stand a fair chance.”

Nickel prices have fallen sharply as Indonesia ramps up supply with China’s backing, while cost pressures in Australia have increased.

– AAP