25/11/2008 - 16:29

$3.3bn writedown for Ravensthorpe

25/11/2008 - 16:29

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The value of BHP Billiton's Ravensthorpe and Yabulu nickel operations have been written down by $US2.1 billion ($A3.3 billion), which equates to three quarters of its total investments in the related projects.

$3.3bn writedown for Ravensthorpe

The value of BHP Billiton's Ravensthorpe and Yabulu nickel operations have been written down by $US2.1 billion ($A3.3 billion), which equates to three quarters of its total investments in the related projects.

The company attributed the writedowns to the "significant" deterioration in the nickel market, which has seen other nickel miners, including Russia's Norilsk Nickel, to place operations into care and maintenance.

"The impairment of the Ravensthorpe and Yabulu operations is mainly due to the significant deterioration in the nickel market, which has seen a dramatic fall in demand, coupled with changes in the rate of production ramp up for Ravensthorpe and the projected sustaining capital expenditure," BHP said in a statement.

"BHP Billiton will continue to review the operating performance and future value of both operations in accordance with normal practice."

The company officially opened the $2.2 billion mine in May this year and according to a past slide presentation, the operation has produced some 8500 tonne of nickel.

The mine has a production capacity of 50,000t which BHP has previosuly said it expects to achieve in 2010. The operation has a 21-year mine life.

In a conference call late this afternoon, BHP chief executive Marius Kloppers said he was not able to disclose thecurrent value of Ravensthorpe, saying the mine and Yabulu are always valued together.

He added that no jobs will be impacted by the writedown.

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