The WA resources revival continues.
A couple of years ago, Nickel West was on the for sale list at BHP. Even as late as the middle of this year there was solid market talk that BHP was hunting for buyers.
And while the sale process was on foot, the company was whipping the business into shape, finding more nickel and talking about major mine expansion plans for developing investment projects for two major nickel processing businesses in WA and acting on them.
Then in August, about the time of the release of the 2017/18 annual results, BHP decided to keep the Nickel business – the reason, the company had become convinced in the emerging electric car/battery boom, as well as the continuing growth in renewable energy sources – all of which need as much if not more copper (especially cars) than older technologies.
This week BHP’s Nickel West division said ‘go’ to the first of a number of new mining developments in the northern Goldfields of WA after the State Government signed off on the Venus underground nickel mine near Leinster.
The multimillion-dollar development is expected to create 150 jobs during its construction phase and 200 once operations begin, as BHP turns the key on its program to revitalise the once-moribund nickel business to meet what is expected to be a surge in demand from the supply battery industry.
It means BHP will have two major expansion projects in different metals underway in WA at the same time – the other is the $3 billion-plus South Flank iron ore mine in the Pilbara and associated infrastructure.
Both Rio Tinto and Fortescue have multi-billion dollar iron ore expansion projects underway in the Pilbara, Rio is said to have made a big copper fine in the Eastern Pilbara.
On top of that major new lithium, projects are underway in the Pilbara and at Greenbushes in the south worth in excess of $3 billion.
Nickel West Venus, which boasts high-grade nickel sulphides and a mine life of about eight years, will enter production next year after receiving its final sign-off on Tuesday. Discovered in 2012, the 200,000-tonne Venus ore body grades as high as 6% nickel and will feed ore to the Leinster concentrator.
Venus is the first of three new mines in the Leinster and Mt Keith areas to get the green light from BHP.
BHP’s Mt Keith satellite deposits and Leinster B-11 block cave mine are both expected to boost Nickel West’s production base and workforce over the next two years.
These new mines and their output will help feed a nickel sulphate plant at its BHP’s Kwinana Refinery near Perth to supply nickel for the battery industry.
Stage 1 is expected to produce 100,000 tonnes of nickel sulphate a year. A mini-plant has been constructed to deliver samples of nickel sulphate product to customers. The first production from the nickel sulphate plant at the Kwinana Nickel Refinery is expected at the end of FY2019. We continue to explore options for a Stage 2, 200,000-tonne nickel sulphate facility. We will continue test work on a cobalt sulphate circuit plant at the Kwinana Nickel Refinery, which would produce a cobalt sulphate product.
BHP shares rose 0.9% to $31.92 yesterday in a market that fell 0.8%.