Western Australia's nickel miners believe the industry has hit rock bottom, and will be buoyed by a surge in demand by the end of the decade.
But as weakness in the nickel price persists, producers and mine developers might be in for some more pain until a full recovery gets underway.
The heads of three major nickel companies told a conference in Perth this week that nickel shortages were expected to boost the metal's price between 2015 and 2019, as production dries up and Chinese demand increases.
Poseidon chief executive David Singleton said the sector had been on its knees in recent years, but that was about to change.
"We've probably seen the worst of it," Mr Singleton said.
However, it is difficult to pinpoint exactly when the recovery would arrive, he said.
The completion of two recent offshore deals would soon take 33,000 tonnes of nickel out of the market, he said, and significantly reduce the annual global surplus of around 60,000 to 80,000 tonnes.
"You only need a 50,000 tonne project like Ravensthorpe to close, then Indonesia to pull back on exports, and all of a sudden we'll be in a raging different market," Mr Singleton said.
BHP mothballed its Ravensthorpe nickel mine in Western Australia in 2008, and industry observers say production of lower grade Indonesian products is limited.
Sirius Resources managing director Mark Bennett said conditions were still difficult for high cost West Australian producers, but he believes supply shortages will come in the years ahead.
"Right now if you're a producer it's tough," Mr Bennett said.
He said the nickel industry in WA could experience more mine closures and job losses due to weak prices and high costs.
Still, he expects construction of his company's Nova mine to begin in June next year.
Mr Singleton said the mining jobs market had changed significantly since the mining downturn began.
Some companies, which had 30 to 50 per cent staff turnover two years ago, now experienced five to six per cent turnover.
Nickel miners now find it much easier to find geologists and engineers, he said.
Western Areas chief financial officer Joe Belladonna said his company had cut costs aggressively over the past year in response to the recent mining downturn.
"While we have worked targeting 10 to 15 per cent cost reductions and we remained profitable throughout the cycle," Mr Belladonna said.
He said higher cost producers would struggle in the current environment.
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