Sulphide ore at BHP Billiton’s Mount Keith mine prior to crushing, grinding and flotation

Melbourne, Australia --- MININGREVIEW.COM --- 23 December 2009 - BHP Billiton Limited ‒ the world’s biggest mining company ‒ has stated emphatically that it has no plans to exit nickel mining, and will not be selling its Australian and Colombian nickel assets.

Making this announcement in an e-mailed statement here, company spokeswoman Kelly Quirke was refuting a report in “The Age” newspaper that BHP Billiton might consider selling its Australian and Colombian nickel assets next year for between US$3 billion (R22.5 billion) and US$7 billion R52.5 billion).

“Chinese buyers may be best placed to buy the assets should they be offered for sale,” The Age revealed. Melbourne-based BHP’s nickel assets include the Mount Keith and Leinster mines, the Kambalda nickel concentrator and the Kalgoorlie nickel smelter in Australia, plus the Cerro Matoso project in Colombia.

BHP this year sold its Yabulu nickel refinery for an undisclosed sum, and its Ravensthorpe mine in Australia to Canada’s First Quantum Minerals Limited for US$340 million (R2.5 billion). The company reported total US$4.2 billion (R31.5 billion) one-time losses on the sales in August.

BHP has an internal view that the nickel price may be capped at US$12 a pound because of the emergence of Chinese nickel pig-iron production in 2007 and 2008, The Age reported. Quirke declined to comment, referring to statements made by CEO Marius Kloppers in August.

“These developments have changed the dynamics of the nickel market a little, and probably mean that prices will be capped more on the upside,” Kloppers said in a transcript of a conference call. “I do not think that it changes our commitment to the product at all. We believe that the portfolio has been reconfigured as one that we are committed to. We want to grow in due course,” he added.