BHP offloads Ravensthorpe nickel mine XAVIER LA CANNA December 9, 2009 - 5:19PM AAP
BHP Billiton Ltd has agreed to offload the Ravensthorpe nickel mine in Western Australia to a Canadian copper miner for $US340 million ($A376.02 million) - at the lower end of price estimates.
Nearly one year after BHP Billiton mothballed the mine, forcing 1,800 people to lose their jobs and creating a public relations nightmare, the sale may see the facility eventually re-opened.
The sale of Ravensthorpe to First Quantum Minerals Australia Pty Ltd, a wholly owned subsidiary of Canada's First Quantum Minerals Ltd, was announced on Wednesday.
"The company (First Quantum) intends to undertake further review work with a view to recommencing operations at Ravensthorpe," BHP Billiton said in a statement.
"It is expected the sale will be finalised during the first quarter of 2010 calendar year."
BHP had been considering its options for Ravensthorpe after the nickel mine, which cost about $US2.1 billion ($A2.32 billion) to build, shut its doors in January.
It closed amid production issues with the nickel laterite deposit and plunging prices for the metal. BHP wrote-down the mine's value to zero.
First Quantum headed off competition from Minara Resources Ltd, and China Metallurgical Group to buy the project.
Ravensthorpe was expected to be sold for between $US300 million and $US500 million ($A331.79 million and $A552.98 million).
The sale is subject to approvals from the Foreign Investment Review Board (FIRB) and the Western Australian Minister for Mines and Petroleum.
BHP Billiton acting president of stainless steel materials, Gerard Bond, described the sale as "outstanding".
"We are delighted that BHP Billiton and First Quantum have reached this agreement," Mr Bond said.
"This reflects the culmination of a thorough and exhaustive study into a range of future options for Ravensthorpe, which has delivered a positive outcome for BHP Billiton, First Quantum and the local communities of Hopetoun and Ravensthorpe."
Bell Potter Securities client adviser Chris Kimber said Ravensthorpe may eventually prove to be a productive asset.
But the miner got so much bad publicity from its closure that it had accepted a sale price at the bottom end of estimates, he said.
"When things are looking better they may say 'hold on, I wish we still had that'," Mr Kimber said.
Due to the sale, BHP Billiton will reverse previously recognised pre-tax impairment charges from June 30 of an estimated $US630 million ($A696.75 million) for the half year ending December 31.
Bruce McNally from the Ravensthorpe Hopetoun Media Liaison Group said it was great news that the mine could be re-opened.
"We are very excited about that, that is absolutely fantastic," he said.
"I am even more excited to see the back of BHP," he added, describing the world's biggest miner as a "parasite" on the community.
He said he hoped the decision meant some of the struggling local businesses who had invested in readiness for the mine's operation would get a boost.
Shares in BHP Billiton closed down 50 cents at $40.55 while shares in Minara Resources were down three cents, at 73 cents.
