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BHP thinks twice about Nickel West sell-off

  • Wednesday, August 22, 2018
  • Source:ferro-alloys.com

  • Keywords:BHP,Nickel West, sell-off, think twice
[Fellow]BHP thinks twice about Nickel West sell-off

[ferro-alloys.com]Nickel West is set to remain in the BHP fold for now after chief executive Andrew Mackenzie poured cold water on rumours of an imminent sale.

Market speculation has raged in recent months that the mining giant was dusting off plans to sell the WA asset, but Mr Mackenzie said yesterday Nickel West was not part of an ongoing sales process and that the company was “taking a pause” with its divestment ideas.

The BHP boss was speaking after the Big Australian unveiled a 37 per cent fall in full-year profit to $US3.7 billion ($5.10 billion), after taking $US5.2 billion in impairments and charges on its US shale business.

Nickel West had been slated for sale by BHP after it failed to make the cut of assets in the spin-out of South32 in 2015.

The unit has since sat on BHP’s books as “non-core” with continuing speculation about its future.

Mr Mackenzie said the company’s new thinking about Nickel West was attributable to a change in the unit’s performance and the market in which it operated.

“The nickel that comes out of Nickel West is particularly suited for the manufacture of batteries for electric vehicles,” he said.

“The team there have done a great job at both improving the performance of that business and looking at a much longer-term future than was foreseen at that time (of the South32 demerger). “Both the change in the market towards electric vehicles and the change in performance has meant the asset is now worth a lot more than at the time of the South32 de-merger and it gives us a very strong feeling as to what any reserve price needs to be.”

Mr Mackenzie said BHP would retain Nickel West as “non-core” but delay any sale process.

“We’re happy to retain Nickel West for now, but it could go either way in the future and the people who run that asset are well aware of that,” he said.

Under the management of Eddy Haegel, Nickel West has announced a wave of developments designed to keep the division operating until 2040.

Nickel West has announced mine developments to help underpin a 100,000tpa nickel sulphate plant at its Kwinana refinery to supply battery-grade nickel products.

It is already considering a stage two expansion of the plant to double production as well as the option of producing another battery material, cobalt sulphate. The division expects to send 90 per cent of its nickel into the lithium ion battery market by the end of next year.

Nickel West’s underlying profit increased from $US44 million to $US291 million before interest, tax, depreciation and amortisation in 2017-18.

  • [Editor:王可]

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