BHP Billiton abandons sale of Nickel West mining operation

BHP Billiton Ltd's plan of focusing on only four core commodities has suffered a setback for now after the mining giant failed to sell its Nickel West mining operation at a right price.

BHP Billiton, the world's biggest mining company did not get the price it had sought and will now hold on to its Nickel West mining operation in Western Australia.

Nickel West assets include Mt Keith - a large, open-cut nickel mine and concentrator, Leinster - two underground nickel mines and concentrators, Kalgoorlie - a nickel concentrator and smelter which produce nickel concentrate and nickel matte and Kwinana – which produces nickel metal in the form of London Metal Exchange grade nickel briquettes and nickel powder as well as a range of saleable co-products.

Deutsche Bank had earlier valued Nickel West operations at around $321 million.

In April this year, BHP Billiton confirmed media speculation that it is weighing spinning off or selling some of its non-core assets into a new $20-billion resources company. (See: BHP Billiton weighs $20-bn non-core assets spin-off)

The Anglo-Australian miner had hired Goldman Sachs as its advisor to work on several strategic options, including a demerger of its non-core operations like aluminum, nickel and bauxite businesses, which then had an estimated value of $20 billion.

BHP Billiton, which has a market cap of A$119 billion, had 2013 revenues of $67.83 billion, has iron ore and copper as its biggest and second-biggest revenue earners.

The company's plan is to focus on its key businesses like iron ore, copper, petroleum, thermal coal, and potash, and spin off or sell its aluminum and coal assets in South Africa, nickel, bauxite, manganese, alumina, coal and zinc mines in Australia.

Yielding to pressure from UK investors to  separately list on the London Stock Exchange, those mining assets that the company does not find sufficiently profitable,  BHP Billiton announced in August that it would spin off its aluminum, coal, manganese, nickel and silver assets into the new company.

BHP Billiton has pursued simplification of its portfolio for several years, and in the last two years has announced or completed divestments of petroleum, copper, coal, mineral sands, uranium and diamonds assets in Australia, the US, Canada, South Africa and the UK.

Last year, BHP Billiton sold its majority stake in Ekati diamond to Harry Winston Diamond for $500 million, and this year sold stakes in the Browse petroleum joint venture to PetroChina for $1.63 billion.