Last Updated : 23 December 2009 at 02:00 IST

BHP all set to exit Nickel business

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SYDNEY (Commodity Online): Global miner BHP Billiton has pulled out of a $2 billion nickel project in the southern Philippines, selling its 40 per cent stake to a local partner.

The project was BHP’s only mining venture in the Southeast Asian country and the move could be part of the miner’s plan to exit the nickel business as early as next year after selling two major nickel divisions in four months.

In a statement, BHP said it signed sales agreement for the stake with Asiaticus Management Corp of the Philippines, which is controlled by Filipino businessman Peter Tan and already owns 60 per cent of the undeveloped nickel mining and processing project in the southern Mindanao region.

BHP and Asiaticus had been at odds over when to start commercial production. Asiaticus pushed to begin as soon as possible, while BHP wanted to wait until 2015 at the earliest.

In 2007, the Philippine government announced that BHP would invest up to $2 billion in the country. The mine is estimated to have 200 million tonnes of nickel ore reserves with 1.3 per cent nickel.

BHP had spent about $3 million on exploration. BHP last month signed a joint venture agreement with state-run PNOC-Exploration to develop the West Balabac offshore oil in the Palawan Basin, with BHP taking a 75 per cent interest.

Philippines is targeting its mining sector, one of the world’s largest and most profitable in the early 1970s, to attract up to $14.5 billion in investments by 2013.

Since backing out of its Gag Island nickel joint venture with Indonesia’s PT Antam Tbk 13 months ago, BHP has sent mixed signals about nickel.

The company still produces around a tenth of the world's nickel each year from operations in Australia and Colombia, but earlier this month it agreed to sell its Ravensthorpe laterite nickel project to First Quantum Minerals for $US340 million, and in July it sold its Australian Yabulu refinery to a local mining magnate, signalling that nickel, bought by stainless steel producers for alloying, has less-favoured status in BHP.