Guess which little ASX mining stock is rocketing 177% on big government news

Investors are reacting to the government news by sending the ASX mining stock flying.

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A little-known ASX mining stock is setting the bar high today.

Very high.

The All Ordinaries Index (ASX: XAO) is down 0.5% today. But at the time of writing shares in this ASX mining stock are surging an eye-watering 177.2% to 9.7 cents apiece following major federal government news.

Any guesses?

If you said Alliance Nickel Ltd (ASX: AXN), give yourself a virtual gold star.

Here's why investors are sending the ASX mining stock rocketing on Thursday.

ASX mining stock explodes on government project award

With nickel prices tumbling in 2023 amid growing cheaper and dirtier nickel supplies out of Indonesia and China, a lot of Aussie nickel miners have come under pressure.

Indeed, as of market open this morning, the Alliance Nickel share price was down 60% over the past 12 months.

But the ASX mining stock is shaking off those losses and a lot more today after reporting that the Australian federal government has granted its NiWest Nickel Cobalt Project, Major Project Status.

Located in Western Australia, NiWest is reported to contain one of Australia's highest-grade undeveloped nickel laterite mineral resources. The ASX mining stock is targeting production of 90,000 tonnes nickel sulphate and 7,000 tonnes cobalt sulphate per year from the project.

NiWest marks the first Australian nickel project granted Major Project Status since nickel was added to the critical minerals list in February.

The status is awarded to Australian companies and projects the government believes are strategically significant. Among the benefits, these projects can expect to receive additional support with federal and state regulatory approvals for a three-year period.

Alliance Nickel said that it was granted the status for NiWest in recognition of the potential contribution to Australia's economic growth and critical minerals industry. It said this recognition will help support the rapid advancement of the project. And it noted that this comes at an opportune time "as global demand for IRA compliant battery-grade nickel and cobalt grows".

Commenting on the government award sending the ASX mining stock flying higher today, Alliance Nickel CEO Paul Kopejtka said:

We are delighted NiWest has been recognised by the Australian Government as a project of national significance. NiWest is the first nickel project to be awarded MPS since nickel was added to the Critical Minerals List earlier this year.

The NiWest Project is now recognised as significant from an industry and economic perspective, and we look forward to working closely with relevant Ministers, Government and industry bodies as we move towards construction.

Motley Fool contributor Bernd Struben has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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