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.
British Lithium Pressured Due To Calls for Electric Cars
The British demand for lithium is set to reach 75,000 tonnes by 2035 as the government works towards their ban on the sale of high-polluting diesel and petrol vehicles within the UK. This comes as automakers worldwide continue to insist on the benefits electric vehicles will have on slowing the rate of climate change.
It is estimated that the UK will require 50,000-60,000 MT of lithium carbonate a year by 2035 for battery production to satisfy government needs. This is assuming production remains at 1.2 million vehicles per year, and the amount of lithium required does not increase.
British Lithium, which hopes to begin constructing a quarry to produce 20,000 MT of lithium carbonate a year in a $400 million investment, are not without competitors, both within the UK and abroad.
Competition For Lithium Rises In Europe
After only five years after its initial launch, Cornish Lithium is setting its sights on becoming a UK powerhouse in mining lithium, aiming to begin commercial production in under four years. Jeremy Wrathall, a former investment banker and current managing director of Cornish Lithium, had the future in mind when founding the company.
“In 2016, I started to think about the electric vehicle revolution and what that would mean for metal demand, and I started to think about lithium,” he said in an interview with AFP. “A friend of mine mentioned lithium being identified in Cornwall, and I just wondered if that was a sort of unrecognised thing in the UK.”
Lithium was first discovered in Cornwall around 1864 and has not been mined again since 1914 when it was produced as an ingredient in fireworks. Now, however, Cornish Lithium is reportedly in the testing stage to see if the metal can be produced commercially to meet the growing demand required for the electric car sector.
Despite Cornwall’s close historic ties to mining lithium, Wrathall insists that the project is purely commercial.
Cornish Mining Revival For Lithium Production
“It’s not a mission that drives me to the point of being emotional or romantic,” he says. “It’s vitally important that we do get this technology otherwise Europe has got no lithium supply.”
The European Commission has also stated their goal to end the sale of new petrol and diesel cars by 2035 to aid the environment. That being said, the majority of lithium extraction currently relies on power provided by environmentally damaging fossil fuels─a slight contradiction.
Alex Keynes, from the Brussels-based lobby group Transport & Environment, is adamant that mining for lithium should be done sustainably.
“Our view is that medium-to-long term, the majority of materials including lithium should come from efficient and clean recycling.
“Europe from a strategic point of view should be looking at securing its own supply of lithium.”
Despite growing competition from abroad, British Lithium Chairman, Roderick Smith, continues to place importance on the mining of lithium within the UK.
“Imagine what the UK economy would look like if we lost our automotive industry,” Smith says. “The stakes are high for the UK.”
Smith expects the UK to compete with other European countries to secure a lithium battery plant in the near future.