BHP Billiton has served up a surprise by talking up the prospects of its Nickel West division in the face of depressed prices for the stainless steel ingredient.
Nickel West is the price-challenged division BHP withdrew from sale last year after failing to attract reasonable offers, and it is the division that was not good enough to be included with the other non-core assets spun off by BHP into South32 earlier this year.
Because Nickel West was seen internally as doubly non-core to BHP, it was to be run for cash and would not receive new investment, raising fears that the once proud business — spawned during the Poseidon nickel boom and a cornerstone of BHP’s 2005 acquisition, WMC — would be left to wither on the vine.
But at the Australian Nickel conference in Perth, Nickel West’s new asset president, Eddy Haegel, said there was a now sense of “nervous excitement’’ in the division. He said Nickel West had embarked on a journey to reinvent itself by adopting a junior miner mindset, while remaining inside the world’s biggest mining company.
And while the business remains non-core to BHP, Mr Haegel said Nickel West would “not be cost-cutting itself to oblivion’’.
Instead, it has set to become a more resilient, more flexible and lower-cost producer that will be “better able to navigate the lows of the nickel price cycle”.
“We are on this journey and when complete I believe it will also bring with it the substantial upside that exists when metal prices rise again,’’ he said.
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