BHP agrees to sell Ravensthorpe for US$340 million

The sale is subject to relevant approvals from the Australian Foreign Investment Review Board and the West Australian Minister for Mines and Petroleum.
First Quantum is listed on the Toronto Stock Exchange in Canada and the London Stock Exchange in the United Kingdom. The company intends to undertake further review work with a view to recommencing operations at Ravensthorpe.
BHP Billiton's acting president of stainless steel materials, Gerard Bond, said the result was an outstanding outcome for all parties, including the local communities.
"We are delighted that BHP Billiton and First Quantum have reached this agreement. This reflects the culmination of a thorough and exhaustive study into a range of future options for Ravensthorpe, which has delivered a positive outcome for BHP Billiton, First Quantum and the local communities of Hopetoun and Ravensthorpe.
"We will work with the new owners of Ravensthorpe to ensure an effective handover of the operation in the coming months," said Bond.
Chairman and CEO of First Quantum, Philip Pascall, said, “The acquisition of the Ravensthorpe Nickel Operation is a major step towards First Quantum achieving its goal of becoming a globally diversified mining company.
“This project together with the recently announced commitment to build the Kevitsa project in Finland has the potential to make the company one of the world’s leading nickel producers. We are committed to re-starting Ravensthorpe which we believe we can successfully achieve within a realistic timeframe.”
He said the company was confident that its experience from many years of successfully developing and operating complex projects will be invaluable in making this a reality.
“Our exceptional balance sheet, strong cash flow from the company’s existing operations and the realistic capital cost base for Ravensthorpe provide us the time and flexibility to address the commissioning and operational issues previously encountered in order to realise the full potential of this exceptional project.”
The project is located in Ravensthorpe, Western Australia, approximately 550 kilometres south-east of Perth. It is an open cut mine and hydrometallurgical process plant that uses proven technology to recover nickel and cobalt to produce a mixed nickel cobalt hydroxide intermediate product.
First Quantum expects the project’s average annual production of nickel metal will be approximately 39,000 tonnes for the first five years after recommencement of operations and an average annual production of 28,000 tonnes of nickel metal over the expected life of mine of 32 years. Ravensthorpe’s development was completed in 2007 however; operations were suspended in January 2009 after the LME nickel price dropped to as low as $8,810.00 per tonne in late 2008.