Sirius signs nickel offtake deal with BHP Billiton

Sirius Resources has signed a deal which will see it supply nickel concentrate to BHP Billiton.

Under the offtake agreement, Sirius will truck concentrate from the Nova mine site to Nickel West’s processing facility at Kambalda for three years.

Production of the concentrate is expected to commence in 2016, with BHP set to take half of the 26,000 tonnes a year that will be produced.

The commercial terms of the agreement remain confidential, but Sirius managing director Mark Bennet said it was “attractive”.

“We are pleased to have secured such an attractive offtake deal for half our planned nickel production,” Bennet said.

The deal comes just months after BHP announced that it will not sell its Nickel West assets after it was unable to find a buyer on its terms.

The miner put the assets on the table in May last year, when it looked to spin off its Mount Keith, Cliffs, and Leinster mines and concentrators, as well as the Kalgoorlie smelter, Kambalda concentrator, and Kwinana refinery.

At the time BHP said it was considering all options for the assets, with BHP CEO Andrew Mackenzie stating that Nickel West was not a good fit for either BHP or the proposed spin-off company South32.

Soon after this announcement it was reportedly approached by a number of companies for the assets, including Glencore – which operates the nearby Murrin Murrin mines, X2 Resources, Sherrit International, and the Jinchuan Group.

However after being unable to achieve a sale on an “acceptable basis” the miner walked away from the sales process. 

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