As reported in MINING DAILY yesterday, BHP Billiton has found a buyer for its defunct Ravensthorpe nickel mine in Western Australia.
First Quantum Minerals Australia, a wholly owned subsidiary of Canadian copper miner First Quantum Minerals, has agreed to a price of US$340 million for the mothballed operation.
The sale price is believed to be at the lower end of market expectations with BHP reportedly after US$500 million.
The company spent up to $2.1 billion developing the project, only to close its doors at the height of the global economic downturn in January after less than a year of operation.
The mine’s closure cost around 1800 jobs and devastated the local community of Hopetoun, which had largely been established around the Ravensthorpe operation.
BHP said it expects the sale, which still requires the approval of the Foreign Investment Review Board, to be finalised by in the first quarter of 2010.
First Quantum beat out other Raventhorpe suitors, including Minara Resources and China Metallurgical Group.
“This reflects the culmination of a thorough and exhaustive study into a range of future options for Ravensthorpe,” BHP acting president of stainless steel materials Gerard Bond said.
“We are delighted that BHP Billiton and First Quantum have reached this agreement.”
There are yet to be any clear indications of a timeframe for the operation re-opening or how many local jobs will be made available.
Western Australian Premier Colin Barnett told Perth’s Radio 6PR that he hopes First Quantum will be able revitalise both the project and the area, but was wary of thinking too far ahead.
“I hope they have got the ability and the commitment to bring this project on,” he told Radio 6PR.
“I’m optimistic, obviously, but Ravensthorpe has had some disappointments.”
For its part, First Quantum has said that it is committed to the Ravensthorpe community.
“We fully recognise our responsibility to the Ravensthorpe community and all other stakeholders,” First Quantum president Clive Newall said.
“We are committed to re-starting Ravensthorpe, which we believe we can successfully achieve within a realistic timeframe.”
The price of nickel reached record highs of US$54,050 per tonne in mid-2007 but plummeted in 2008 to as low as US$8000 per tonne as economic growth continued to slump.
The price of nickel has almost doubled since BHP shut down Ravensthorpe in January.