And it’s not just nascent or aspiring companies that are feeling the pinch of the collapse in pricing. Australia’s richest man, Andrew Forrest, has announced he is about to put his privately owned nickel mines in care and maintenance, and BHP’s nickel refining operations fed by nearby Forrest’s mines are to be mothballed from June.

And only a couple of months ago, Gina Rinehart splashed out $1.3 billion to grab a 19 per cent stake in lithium hopeful Liontown, demonstrating timing that could only be described as impeccably poor but incredibly lucky for suitor Albemarle, which withdrew its takeover bid for Liontown after being thwarted by Rinehart.

This week, Liontown revealed it had lost access to a $760 million loan ­offered only three months ago. The banking syndicate was apparently frightened off after experts Wood Mackenzie released price forecasts which, if correct, would put Liontown under pressure to meet lending covenants.

This is more than a bumpy ride for these commodities, with lithium plunging 90 per cent in a year and nickel falling 40 per cent.

What’s behind what might seem like a counterintuitive collapse is a familiar tale of a free market’s response to fresh demand fundamentals. These minerals are typically used in batteries that will power, among other things, electric vehicles.

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Demand has risen sharply, but supply has risen more steeply, and the sting in the tail is that supply is coming from parts of the world that can produce and sell it at a cheaper price, such as Indonesia, Africa and China.

The nickel sector’s problems in particular stem from the explosion of production in Indonesia, whose government has played the game particularly well by demanding that those wanting access to its laterite nickel deposits must build downstream refineries. Indonesia is now producing more than half global supply.

Forrest rightly argues that the price of nickel produced in a more environmentally friendly way should receive a premium over production that depends on cheap coal-fired power, such as the nickel coming out of Indonesia. But this isn’t happening.

There are a couple of ways in which this imbalance between supply and demand can be ameliorated over time.

Lower prices have already begun to remove high-cost supply. The imbalance could also be addressed by increasing demand for EVs.

And while EV demand has been strong, the cost to the consumer remains significantly higher than the cost of petrol vehicles, which is a disincentive for consumers who have already been assaulted by a cost of living crisis.

There is a self-correcting element in this as well. If cheaper battery materials lead to cheaper electric vehicles, then demand will ultimately catch up.

But this rebalancing could be years away, according to predictions.

In the meantime, Houston, we have a problem.

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