WA Premier Roger Cook announced on Saturday an 18-month rebate on royalty payments to help producers to ride out the slump in prices paid for the metal.
"The nickel industry supported almost 10,000 jobs, and generated sales of more than $5 billion last financial year," he said.
"It is also an essential component of the state's vision of becoming a global hub for the downstream processing of battery metals."
The financial assistance program comes after six operating facilities, including major employer BHP, announced they were scaling back loss-making operations and mothballing processing plants and mines.
Nickel prices have fallen sharply in recent months as Indonesia ramps up supply with China's backing, while cost pressures in Australia have increased.
WA Treasurer Rita Saffioti said the relief was consistent with previous royalty assistance programs to assist lithium producers, and junior iron ore producers, to adjust to changing market conditions.
Starting from the March quarter 2024, the rebate will be provided if the average price of nickel in concentrate is below US$20,000 per tonne for a given quarter.Â
The rebate will then be repayable by companies in equal quarterly instalments over the following 24-months.
Companies will need to apply for financial assistance and provide details of their need for support as well as steps taken to adjust to the current price environment and structural changes in the industry.
Mines and Petroleum Minister David Michael said Australian nickel miners could be part of ongoing and future efforts to decarbonise the world.
The battery mineral was added to the federal Critical Minerals List on Friday to help support the industry, after being left off in a mid-December update.
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.
The Association of Mining and Exploration Companies has called for a 10 tax credit for producers to ensure Australia remains competitive.
"There is more that can be done and needs to be done," for an industry that is "hurting badly", association chief executive Warren Pearce said.
He also welcomed recent hints by Prime Minister Anthony Albanese of a substantial package in response to massive United States subsidies that are drawing investment away from Australia.
With the international nickel price forecast to stay low through 2024, production credits are under consideration, according to federal Resources Minister Madeleine King.
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