BHP Billiton Draws Major Bidders with Nickel West Asset

The build up for BHP Billiton’s Nickel West asset is heating up. The ante for the Western Australian projects just got bigger as there are now six potential bidders vying for the properties.

Mining giants Glencore, MMG, X2 Resources, Trafigura, Sherritt International and Jinchuan Group have all inquired about purchasing the asset. The deal for Nickel West will include the sale of Mt. Keith, Cliffs and Leinster mines and associated infrastructure with the Kalgoorlie smelter, Kambalda concentrator, and the Kwinana refinery.

Analysts predict the price tag for the nickel asset could reach close to $750 million.

BHP Billiton confirmed in May it was considering selling all or part of its Australian nickel unit as prices surge amid an Indonesian export ban.

Chief Executive Andrew Mackenzie has said simplifying the company’s product portfolio was a “priority” and would like to run a smaller collection of assets with long lifespans. The company is realigning its portfolio to focus on its four pillars – iron ore, coal, copper and petroleum.

Nickel West produced 103,000 metric tons in financial 2013 and the site booked impairment charges of almost $1.6 billion in the past two financial years. The price of nickel has increased about 40 percent this year in London after Indonesia banned raw-ore exports in January.

Michael Oke, a spokesman for London-based X2 Resources, Francis de Rosa, a Sydney-based spokesman for Glencore, and Kathleen Kawecki, a Melbourne-based spokeswoman for MMG, wouldn’t immediately comment on the sale process.

Barring any setbacks, BHP Billiton expects to finalize a deal by the end of the year.