BHP nickel sale hits hurdle – by Nick Evan (The West Australian – July 9, 2014)

A native title ruling could throw a shadow over BHP Billiton’s attempts to sell its Nickel West assets, after the Federal Court ruling last week paved the way for native title claims over BHP’s Kambalda nickel concentrator and Gold Fields’ St Ives mine.

In a decision released last week, the Federal Court ruled that the transfer of mining tenements from State Agreements between 2004 and 2007 should have triggered negotiations for a land use agreement with the Ngadju people, who claim native title over the region around Norseman and Kambalda.

The ruling covers more than 200 mining leases transferred from State agreements originally held by Western Mining Corporation.

They include leases over BHP’s Kambalda nickel concentrator and Gold Fields’ 400,000 ounce-a-year St Ives mine, the fourth largest gold producer in Australia last year.

Gold Fields said in January the action could force the closure of St Ives if the native title claimants sought an injunction to do so.

But the company softened its rhetoric this week, saying in a statement the decision “does not affect the grant of mining tenure to St Ives”. It added operations would continue as usual pending the outcome of the process.

It is understood that, should the decision withstand appeal, the most likely outcome would be to force BHP Billiton and South Africa’s Gold Fields to the negotiating table to discuss compensation for previous and future years of the production from the facilities.

The decision comes at a particularly tricky time for BHP, which is running a beauty parade of buyers for its Nickel West assets.

A resurgent nickel price has lifted hopes it can get a good price for its WA nickel assets, but sources say any uncertainty over its tenure on key elements of the business, such as the Kambalda concentrator, could weigh on the final price.

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