BHP Billiton Ravensthorpe Nickel Project: Difference between revisions

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BHP Billiton Ravensthorpe Nickel Project was a project to develop a nickel mine and processing facility 35km east of the town of Ravensthorpe, approximately 540km south east of Perth in Western Australia.

The Project

The project was for an open pit mine covering three adjacent ore bodies together with a hydrometallurgical processing planet to treat both saprolite and limonite ores^[1]. Production estimates were for up to 50,000 tonnes of contained nickel and 1400 tonnes of contained cobalt. The processed ore was to be transported 155 km east to the deep-water port of Esperance.

There are three ore bodies at the site with a total proven reserve of 263.3 Mt at 0.65% nickel and 0.029% cobalt, with an estimated project life of 25 years.

History of the project

In November 1999 QNI Pty Ltd a wholly owned subsidiary of BHP Billiton entered into a joint venture agreement with Comet Resources NL. The first stage involved a AU$10 million investment by QNI into a four month evaluation program, which included acquiring 12 percent of Comet at an entry price of AU$0.925 per share^[2]. In April 2000 QNI elected to proceed with development of the project and to purchase a 40% joint venture interest from Comet Resources for AU$36 million at the conclusion of the joint venture agreement, based on an agreed project value of AU$90 million^[3].

March 2001 QNI agreed with Comet to purchase the latter's remaining 50 percent interest in the project at a cost of AU$28 million plus the cancellation of its 19.9% interest in Comet^[4]. In March 2004 BHP announced approval for the further development of the Ravensthorpe project which included development of the mine, treatment plan and other infrastructure. In addition expansion to the related Yabulu Refinery in Queensland was announced. At that stage the capital cost for the combined projects was estimated at US$1.4 billion^[5].

Project Partners

Partners to the project included Comet Resources and Built Environs.

Closure

In November 2008 the mine's operators, BHP Billiton, announced $US2.1 billion in pre-tax write-downs on the project and in January 2009 announced an additional $US1.6 billion in write-downs and an associated half-year loss of $US233 million.^[6]

BHP Billiton closed the mining operations in January 2009, resulting in the loss of 800 permanent and 1000 contractor jobs, of which 350 were in the associated Yabulu nickel refinery in Queensland.^[6] BHP Billiton gave as the reason for closure "the diminished prospects for profitability^[7]". This was at a time when nickel prices had fallen to under US$11,000 per tonne from a high of US$50,000 per tonnne in May 2007^[8]. The Western Australian State Government expected the closure would result in lost royalties of approximately $20 million per annum.

Sale

In December 2009 Canadian mining company First Quantum Minerals announced they would purchase the operations from BHP Billiton for $US340 million.^[9] First Quantum Minerals anticipated production of 39,000 tonnes per year in the first five years, with the creation of 600 jobs.

By the time BHP Billiton sold the project they had spent a total of $US3.6 billion on building and then abandoning the project.

References

[1] ttp://www.bhpbilliton.com/bbContentRepository/News/RelatedContent/RYINOverviewPaper.pdf

[2] ttp://www.bhpbilliton.com/bb/investorsMedia/news/2000/qniElectsToProceedWithDevelopmentOfTheRavensthorpeNickelProjectWithCometResources.jsp

[3] ttp://www.bhpbilliton.com/bb/investorsMedia/news/2000/qniElectsToProceedWithDevelopmentOfTheRavensthorpeNickelProjectWithCometResources.jsp

[4] ttp://www.bhpbilliton.com/bb/investorsMedia/news/2001/qniAcquiresRemaining50PerCentOfRavensthorpeNickelProject.jsp

[5] ttp://www.bhpbilliton.com/bb/investorsMedia/news/2004/bhpBillitonApprovesRavensthorpeYabuluIntegratedNickelProject.jsp

[theage-6] ttp://www.theage.com.au/business/jobs-go-as-bhp-cuts-wa-qld-operations-20090121-7m2q.html

[7] ttp://www.abc.net.au/news/stories/2009/01/21/2470779.htm

[8] ttp://www.perthnow.com.au/news/western-australia/bhp-mine-on-brink-of-closure/story-e6frg13u-1111118603590

[9] Ravensthorpe nickel mine sale, Jade Macmillan http://www.abc.net.au/news/stories/2009/12/10/2767529.htm

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 === The Project ===
-The project was for an open pit mine covering three adjacent ore bodies together with a hydrometallurgical processing planet to treat both saprolite and limonite ores<ref>http://www.bhpbilliton.com/bbContentRepository/News/RelatedContent/RYINOverviewPaper.pdf</ref>. Production estimates were for up to 50,000 tonnes of contained nickel and 1400 tonnes of contained cobalt. The processed ore was to be transported 155 km east to the deep-water port of Esperance.
+The [[project]] was for an [[Open-pit mining|open pit mine]] covering three adjacent ore bodies together with a [[Hydrometallurgy|hydrometallurgical]] processing planet to treat both [[saprolite]] and [[limonite]] ores<ref>http://www.bhpbilliton.com/bbContentRepository/News/RelatedContent/RYINOverviewPaper.pdf</ref>. Production estimates were for up to 50,000 tonnes of contained nickel and 1400 tonnes of contained [[cobalt]]. The processed ore was to be transported 155 km east to the deep-water port of [[Esperance, Western Australia|Esperance]].
 There are three ore bodies at the site with a total proven reserve of 263.3 Mt at 0.65% nickel and 0.029% cobalt, with an estimated project life of 25 years.