BHP Said to Seek $500 Million for Ravensthorpe Nickel Mine

MELBOURNE, Nov. 25 -- BHP Billiton Ltd., the world's largest mining company, aims to raise as much as $500 million selling its shuttered Ravensthorpe nickel mine in Western Australia, a person familiar with the process said.

    The Melbourne-based company expects at least four bids before tomorrow's deadline, said the person, who declined to be identified because details of the sale haven't been made public. Perth-based Poseidon Nickel Ltd., chaired by billionaire Andrew Forrest, is likely to be among the bidders, two people connected with the sale said. Minara Resources Ltd. said this month it may bid for the mine and was 'exploring" funding options.

    BHP closed the $2.2 billion Ravensthorpe mine this year after the price of nickel plunged. In July, it sold the Yabulu refinery, which processed material from the mine, to Australian billionaire Clive Palmer for an undisclosed sum.

    "We have been saying all along we are looking at divestment, potential restart or a permanent closure and we expect to be able to update people by the end of the calendar year," Samantha Evans, a spokeswoman for BHP, said by phone.

    Nickel Resource

    The open cut mine had reserves of 235 million metric tons of nickel ore, with capacity to produce 50,000 tons a year of contained nickel and 1,400 tons of cobalt, according to an October 2008 presentation on BHP's Web site. Bank of America- Merrill Lynch is helping the company study options for the mine, BHP has said.

    Poseidon Chief Executive Officer David Singleton and Minara CEO Peter Johnston declined to comment when contacted today. State-owned China Metallurgical Group Corp. and Canada's First Quantum Minerals Ltd. are also expected to bid, the person said.

    No one was available to comment at First Quantum's Perth office. Qi Dongping, a spokesman for China Metallurgical in Beijing, couldn't immediately be reached for comment.

    BHP included a one-time charge of $3.6 billion for closing the mine in its financial accounts in the year ended June 30. It announced the closure on Jan. 21 when nickel for delivery in three months was trading at about $10,905 a ton. It has since gained 54 percent to trade at $16,750 a ton at 8:28 a.m. local time on the London Metal Exchange.

    (Source: Bloomberg)