BHP Billiton Drops Nickel Mine Plans

Submitted by Jim Thesiger on 14 September, 2009 - 06:48

The Australia based iron ore, copper, nickel and manganese ore producer BHP Billiton (BHP) has dropped its Perseverance Deeps underground nickel mine plans in Western Australia. BHP has also stopped working on plans which were suppose to add 20 years to the life of Cannington silver, zinc and lead mine which is located near the Mt. Isa. The details of the modified plans were published in a chart which included the production growth options of the company, something that was made public for the first time since the devastating periods of the global financial crisis. The abundance of the Perseverance Deeps and Cannington expansion was not a big surprise for many people since BHP was facing considerable pressure with its Nickel business and lately has been tipped off for the auction block.

Earlier in this year, ABN Amro speculated that the Cannington could be closed down. BHP took the decision of spending $150 million US dollars last week, a sign of the company’s willingness to keep its nickel business. Mr. Marius Kloppers, the chief executive of the company mentioned in a statement last month that despite the price of nickel being restricted due to latent supply and also because of the development of pig iron, BHP would remain committed to its nickel business. The portfolio has been reconfigured, he added. The shut down of Ravensthorpe laterite nickel operation in Western Australia that worth $2.1 billion US dollars was the most notable reconfiguration. The operation was closed down within one year of production.

BHP kept the growth options close to the chest despite the downfall in the global markets during the 10 months. Some new appearances were there on the chart, which included the Yeelirie uranium project in WA. The capital expenditure that is expected for 45 percent shares of developing the Rio Tinto operated Resolution copper mine in the United States was revealed by the company as well which passed the $2 billion US dollars mark. Rio Tinto stated that it is expecting to spend $1 billion US dollars for studying the project before it makes a decision regarding the final investment.