Nickel’s run rekindles sale hope – by Barry Fitzgerald (The Australian – March 17, 2014)

SURGING nickel prices have boosted interest in a planned sale by Chinese-controlled MMG of its mothballed Avebury nickel mine on Tasmania’s west coast, which was developed at a cost of $880 million.

Nickel’s price surge — brought on by Indonesia’s export ban on laterite nickel ores — has already prompted BHP Billiton to put out the feelers on a sale of its West Australian nickel business, valued at up to $1 billion, because of the strategy of chief executive Andrew Mackenzie to focus on the “four pillars” of iron ore, coal, copper and petroleum.

Unlike the rest of the metals, nickel has started the year strongly, rising 13 per cent to a 12-month high of $US7.14 a pound. The rise for the stainless steel ingredient is a response to the tightening in supplies caused by Indonesia’s mineral ore export ban taking effect in mid-January.

The ban is an attempt to compel more value-adding to Indonesia’s mineral exports through the development of onshore processing operations. The country is the world’s biggest exporter of nickel and is the main supplier of low-grade nickel laterite ores to China’s nickel pig iron industry.

MMG chief executive Andrew Michelmore told The Australian that a restart of Avebury was not part of MMG’s plans, leaving the company open to offers for it.

“Our issue is that its size doesn’t fit in our portfolio, so it is a case of finding the group for which it becomes an important asset in their growth plans,” he said. There had been “quite a bit of interest” in Avebury and people had been looking “to see how it fits in their portfolios”.

MMG’s hunt for a buyer of Avebury comes as its parent company is in talks to buy Glencore Xstrata’s $US6bn ($6.7bn) Las Bambas copper development in Peru, the sale of which — or other nominated copper assets — was part of Beijing’s approval last year of Glencore’s merger with Xstrata.

MMG — the Hong Kong-listed and Australian-managed offshoot of China Minmetals Corporation — bought Avebury and other assets from OZ Minerals for $1.7bn in June 2009.

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