would ozl buyback avebury?

Minmetals to sell Avebury nickel mine

(BLOOMBERG)
Updated: 2012-05-29 11:18


Oz Minerals' Avebury nickel mine on Tasmania's west coast.
MINMETALS Resources, the publicly traded unit of China's biggest metals trader, is seeking a buyer for Avebury, saying the shuttered Tasmanian nickel mine will be better run by another company.

There was "quite a bit of interest" in the mine on the state's west coast, chief executive Andrew Michelmore said. The "unofficial sale process" was being run by the company without the assistance of banks.

Avebury, which has the capacity to produce about 8500 tonnes of nickel concentrate a year, was closed in December 2008 after prices of the metal used to harden steel slumped about 70 per cent in nine months.

Mining companies including BHP Billiton, the world's biggest, are slowing spending and shedding smaller assets as rising costs for developing new mines, plants, rail and ports curb potential returns.

"We've done a lot of reviews on Avebury and we've done a lot of exploration to see if we can find higher grade," Mr Michelmore said.

"It is only going to be a small mine. It is probably better run by someone else."

Minmetals gained 2.2 per cent to close at $HK3.29 (42c) in Hong Kong, where the unit of China Minmetals is based. The stock has declined 41 per cent the past year, compared with a 19 per cent drop in the benchmark index.

Nickel prices fell 26 per cent in the past year to $US17,102 a metric tonne on the London Metal Exchange, reflecting lower demand in Europe and China.

It fell as low as $US9000 before the mine was shuttered in 2008.