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Mylanta and Panadol were in short supply as the 1700 mining types pushed through the final day of the Diggers & Dealers bash. “Go hard or go home” seemed to be mantra.
But while sympathy was in short supply for those delegates who had badly timed their runs, there was much on offer for our biggest miner, BHP Billiton.
Not that BHP was out and about. While it operates the Kalgoorlie nickel concentrator and smelter, BHP operatives are only seen in the shadows, if at all.
Anyway, BHP’s Nickel West division — the one that wasn’t good enough to shove in to the South32 spin-off — is doing it tough, real tough, as a result of the crash in nickel prices.
Talk around the conference is that it would be no surprise if Nickel West was losing tens of millions of dollars a month — that’s right, a month — at current prices for the stainless steel ingredient of $US4.86 a pound.
Nickel averaged $US7.65 a pound last year, so the metal is down a whopping 36 per cent.
The price pain has already forced closures and cutbacks at the Kambalda nickel operations of the juniors that help feed Nickel West’s Kalgoorlie processing operations, raising questions about what BHP will do if the impact becomes long-term, remembering that the Kambalda material is required for blending purposes with BHP’s own supplies.
It is a headache that could have been avoided last year if BHP had followed through with the sale of Nickel West, complicated as it is by the
$1bn-plus rehabilitation liabilities at the Kalgoorlie operations, and the associated refinery in Kwinana.
Last year’s sales process did find a buyer, Ivan Glasenberg’s Glencore, a nickel producer at Murrin Murrin up near Leonora. But BHP rejected what was rumoured to have been a $180m-$230m offer from Glasenberg, for reasons best known to itself.
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