BHPB shake-up sees veteran fly to Heron -------------------------------------------------------------------------------- Tuesday, 16 January 2007 Stephen Bell
BHP Billiton's recent management upheaval at its headline-grabbing Ravensthorpe nickel venture proved to be timely for nickel wannabe Heron Resources. The Metal Detective by Stephen Bell.
Striking while the iron (or should that be nickel) was hot, Perth-based Heron last month snapped up Ken Hellsten, formerly BHPB's Ravensthorpe president, as a non-executive director.
One of WA's nickel laterite pioneers who managed the construction and start-up of the Cawse operation in the late 1990s, Hellsten quit BHPB last October – around the same time as his former boss, Stainless Steel Materials chief Chris Pointon, pulled the pin.
Pointon's exit made headlines, with some scribes speculating that the executive was made a scapegoat for Ravensthorpe's latest (70%) cost escalation to $US2.2 billion ($A2.8 billion), along with a nine-month delay.
Hellsten, in contrast, made no media ripples. The Metal Detective only learned of his move just before Christmas when Heron unveiled its newest boardroom recruit in a short ASX statement.
MD tracked Hellsten down for a chat late last week.
"We parted on good terms," Hellsten said of his former employer.
"Once the WMC takeover took place [in mid-2005], it was always planned that Ravensthorpe would eventually become part of Nickel West [the former WMC nickel unit]," he told MD.
"It was a good chance for me to do something different."
BHPB revealed to analysts last month that a "new team" at Ravensthorpe had been tracking revised costs and schedule since August.
Ravensthorpe (previously housed in the global Stainless Steel unit) was added to Nickel West as of September, BHPB said.
The new regime sees Marcelo Bastos, former president of BHPB's Cerro Matoso nickel operation in Colombia, overseeing Ravensthorpe in his role as Nickel West chief.
Bastos reports to Jimmy Wilson, who is finding his feet as the new Stainless Steel president.
As for Hellsten, he is keeping his head down and won't comment on the management upheavals.
The former geologist is looking forward to his part-time role at Heron, along with a separate job running a feasibility study for Reed Resources' Barrambie vanadium project.
He remains a firm believer in Ravensthorpe, despite the cost blow-outs that BHPB has blamed on WA's overheated resource construction market.
"I'm sure the business will be a success," he said.
It is doubtful that anyone knows more about the ins and outs of Ravensthorpe's enhanced pressure acid leach process than Hellsten.
He worked on Ravensthorpe for more than six years, joining the former Billiton project after quitting as Centaur Mining's general manager of operations, responsible for Cawse.
Like Murrin Murrin and Bulong, Cawse was eventually subject to cost overruns and major ramp-up delays, but was commissioned on time by Hellsten's construction team.
It was regarded a technical success in the then embryonic field of pressure acid leaching of dry WA nickel laterites.
After the collapse of Centaur in 2001, Cawse ended up with US-based OM Group, but is now in the folds of Russian giant Norilsk.
In joining Heron, Hellsten is back on familiar turf, in more ways than one.
For starters, he is mates with Heron chief Ian Bucchorn and chief operating officer Mat Longworth. All three worked for the Shell/Billiton group in the 1980 as geologists and have crossed paths ever since.
Hellsten was a non-executive director of Heron in 1999 and 2000 after Heron and Centaur formed a short-lived strategic alliance.
Centaur, then run by Joseph Gutnick, also made an unsuccessful takeover tilt at Heron.
Hellsten, along with former Minara Resources chief financial officer Stephen Dennis, joins Heron as the explorer gears up feasibility work on its Jump Up Dam heap leaching project, 70km south of Minara's Murrin Murrin mine.
Heron is also in partnership with Brazil's CVRD over the Kalgoorlie Nickel Project, a long-range venture that could be in production by 2013 if all the stars line up.
Hellsten's experience in project management should prove invaluable to Heron in both cases.
Jump-up Dam is the immediate priority, now in the midst of a scoping study.
The company aims to have some trial heaps in operation by next year, with first commercial production at a rate of 5000 tonnes per year in 2009.
MD understands that around $A200 million is required to get Jump Up Dam into production.
Some of that cash will be needed this year to fund ongoing feasibility work and the start of construction.
Dennis' commercial skills will come in handy once the tin rattling begins.
As will the price of nickel.
With the metal – used in stainless steel production – trading at roughly $US35,000 per tonne, it looks like a good time to be building a nickel mine.
If Heron's new high-powered board can't make money at that price, they should all be looking for new jobs.
HRR Price at posting:
0.0¢ Sentiment: Hold Disclosure: Held
