BHP polishes up nickel unit as demerger talk swirls – by James Regan (Reuters India – April 11, 2014)

SYDNEY, April 11 (Reuters) – Breakthroughs in the way BHP Billiton processes nickel ores could help the world’s biggest miner find a buyer for its ailing Nickel West division in Australia.

Nickel West is among businesses that also include aluminium and manganese which BHP has grouped into a single division set aside in 2012 for underperforming assets deemed non-core to its portfolio. BHP has said it is actively studying the “next phase of simplification” of the company but declined to comment on media reports that senior executives favoured a demerger.

Chief Executive Andrew Mackenzie has said BHP will focus on its large iron ore, copper, coal and petroleum businesses, while selling off smaller, less profitable operations. Macquarie Bank last month in a research note put a value of $4.6 billion on the nickel assets.

Improvements in the way BHP mines nickel together with better market dynamics and exploration successes could save Nickel West from closure.

A programme at Nickel West to extract full value from ore that would otherwise be uneconomic to treat due to high contents of talc is opening up more of BHP’s rich Mount Keith and Yakabindie deposits in Western Australia for mining, enhancing the potential appeal to outside investors.

BHP is a top-tier nickel producer along with Norilsk of Russia, Brazil’s Vale and Glencore Xstrata . Excluding its Cerro Matoso nickel business in Colombia, Nickel West’s operations are located in Western Australia, where 8 million tonnes of contained metal are known to exist, a significant portion in large deposits high in talc.

Add to that a discovery the company made last year and dubbed “Venus’, which geologists consider among the biggest in the world despite the paucity of information BHP has provided on the find.

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