THE WEST AUSTRALIAN
Friday, 14 December 2012 09:51
As more analysts added their voice to the chatter about BHP Billiton divestments, it appears the Big Australian's WA nickel assets are safe for now.
Government sources confirmed that the miner had yet to consult officials about a possible sale of its struggling operations.
Though most of the State Agreements once covering Nickel West's operations were cancelled in 2008, it is understood an agreement covering Leinster would force BHP to consult the State Government over any proposal to sell or shut it.
Premier Colin Barnett would not comment on whether BHP had initiated any discussions but sources close to the State Government said there had been no contact from the mining giant over corporate activity at Nickel West.
Earlier this year BHP wrote down $US450 million ($433.6 million) from the value of Nickel West - including the Mt Keith and Leinster mines, Kalgoorlie nickel smelter, Kambalda concentrator and Kwinana refinery - citing low metal prices and margin deterioration. In October, it sliced more than 100 support jobs from the division.
BHP has consistently denied industry rumours about a sale, but in the wake of Wednesday's $US1.65 billion ($1.55 billion) deal with PetroChina to exit its Browse gas interests, Deutsche Bank analysts yesterday said BHP's streamlining was accelerating. Deutsche identified another $US10 billion to $US15 billion possible divestments, including Nickel West, BHP's aluminium assets and coal operations in South Africa and Indonesia.
"The proceeds could be invested in high returning growth projects such as tight oil (Eagle Ford and Permian), Escondida and Spence, the GoM and Pilbara de-bottlenecking," Deutsche said.
The Browse exit takes the tally of BHP's recent asset sales to $US4.2 billion. As well as WA gas, BHP has exited the Yeelirrie uranium project, its 37 per cent stake in Richards Bay Minerals, and its Ekati diamond mine interest.
The sale of non-core assets will also help bridge BHP's 2013 financial year "funding gap", according to the Deutsche note. With planned capital expenditure of $US22 billion, analysts forecast BHP needed at least $US4 billion in new debt.
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