Nickel exploration began in Western Australia in 1955 with the International Nickel Company after they discovered a large but uneconomic deposit on the border with South Australia. There was little interest in nickel until 1964, when the Western Mining Corporation exploration team was told nickel had been identified in rocks around Kambalda, south of Kalgoorlie.
Nickel sulphides were discovered in 1966 and production began the following year. The discovery spurred extensive exploration for nickel, concentrated mainly between Norseman and Wiluna. The Nepean ore body to the south west of Kalgoorlie was discovered in 1967 and production began there in 1970.
In the late 1960s, there was a shortage of nickel as the major producer, Inco - a Canadian company, were involved in industrial action. High demand for nickel was being driven by the Vietnam War, which significantly increased the price of nickel.
Western Australia experienced a nickel boom on the stock market after Poseidon NL prospector, Ken Shirley, found a promising nickel deposit at Windarra in 1969. Driven by speculation, the price of Poseidon shares rose rapidly. Many were priced out and turned to shares in other mining industries or the new nickel companies being listed to take advantage of this boom. Mining stocks peaked in January 1970 and then crashed.
By the time Poseidon started producing nickel, the price had dropped. The nickel ore was a lower quality than expected which increased the cost of extraction and the profits were not enough to keep the company running. In 1976, the company was delisted and Western Mining Corporation took over the operations.
In 1970, a nickel refinery was established at Kwinana, followed by a smelter near Kalgoorlie in 1973. In the 1990s the refinery and smelter were expanded to increase capacity, and operations at Forrestania were moved underground. These measures made Western Australia one of the lowest cost producers of nickel in the world.
In 2015, nickel was Western Australia’s fourth most valuable mineral sector, worth $3.2 billion. By 2016, however, the price of nickel fell, causing 70% of the nation's nickel producers to run at a loss, leading to redundancies and mine closures. BHP Billiton Nickel West is the largest producer of nickel in the state.