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Ravensthorpe could go for little more than a nickel
By Di Bain for AM



Posted 7 hours 56 minutes ago
Updated 5 hours 42 minutes ago


BHP Billiton's decision to mothball the plant has sent Ravensthorpe reeling. (File photo) (AAP: Andrea Hayward)

Audio: BHP ready to sell Ravensthorpe (AM) Map: Ravensthorpe 6346
Related Story: Hopetoun businesses dying a slow death Related Story: Ravensthorpe voucher system to 'help businesses survive' BHP Billiton is preparing to formally put its mothballed Ravensthorpe nickel plant in Western Australia up for sale and at least one analysts says it may go for as little as $1.

The company shut down the $2 billion plant earlier this year, sacking thousands of workers and leaving two small communities, who were reliant on the operation, reeling.

The decision to sell is understood to come with billion-dollar tax benefits for BHP Billiton and industry insiders believe it is a signal the big miner is looking to exit the volatile Australian nickel market.

The company built the plant when nickel prices were strong but there were teething problems and less than 12 months after they switched it on, they shut it down.

Ravensthorpe shire president Brenda Tilbrook says she has seen mining companies and investors touring the mothballed plant.

"Most of the information I find out is from people that are still working on the mine site, who have to let these people through the gate," she said.

AM understands an information memorandum which outlines sensitive details about the plant's operations and cost structures has been drafted.

This will be given to a handful of prospective buyers who will sign a confidential agreement, which will legally bind them to keeping all the details of any sale a secret.

That is no surprise to industry analyst Gavin Wendt.

"It's a project that isn't that economically viable," he said.

"If that means that a company wants to come along and buy the project lock, stock and barrel, then I think BHP would be very, very happy to walk away."

It is good news for the local shire. The population of Ravensthorpe and Hopetoun has shrunk from thousands to just a few hundred since the shutdown.

Businesses have gone broke and families have been uprooted.

The local chamber of commerce president, Rick Besso, says it has been a tough few months.

"[The] community's been pretty well drained out," he said.

"It's down to a population of less than 300. The business community is working very hard to find new opportunities, new ways it can survive."

It is understood interested buyers include Poseidon, a small WA-based company which has a big backer - iron ore mining boss Andrew "Twiggy" Forrest.

Mr Forrest failed at nickel mining in the 1990s when the Anaconda nickel project fell over.

It is believed he has good financing connections in China and industry sources say he would be keen to succeed in the nickel space.

Whoever does buy Ravensthorpe will need at least $500 million to recommission it.

For this reason Mr Wendt says it will go for a fire-sale price.

"If it might mean walking away for $1, then I think BHP would be happy to end that sorry saga for a minimal consideration.

"I think there's every chance that BHP is looking to exit the nickel business in Australia. There have been rumours around for some time that BHP was looking to sell off its Nickel West business."

BHP Billiton spokesman Peter Ogden says the company will not comment on speculation.