BHP Says Nickel Refinery Shutdown May Last Two Weeks (Update1)

NEWYORK, Mar. 18 -- BHP Billiton Ltd., the world's biggest mining company, said its Kwinana nickel refinery in Western Australia may not be restarted for two weeks after shutting down on March 15.

A lack of hydrogen gas, a key ingredient in the process of refining nickel, caused the shutdown, Amanda Buckley, spokeswoman at the Melbourne-based company, said in a phone interview today. She declined to say whether nickel shipments would be affected.

BHP's Nickel West operations, which include the Kwinana refinery, a smelter in Kalgoorlie and a concentrator at Kambalda, produced 59,400 tons of nickel concentrate in the six months to Dec. 31. Nickel, used to strengthen steel, has more than doubled in London in the past year because of demand from China, the world's fastest-growing major economy.

BHP's Sydney-traded shares fell 0.5 percent lower to A$43.08 at 1:19 p.m. Sydney time on the Australian stock exchange.

The refinery was shut after BHP's own hydrogen plant at the site "experienced some problems" and alternative sources for the gas weren't available, Buckley said yesterday.

"We're in the process of designing and constructing a new hydrogen plant at Kwinana, which is scheduled to be completed 2011," she said today.