BHP Billiton is believed to be formally preparing to test the waters for a potential sale of its failed $US2.2 billion Ravensthorpe nickel mine, near Hopetoun.
It is believed that a detailed Information Memorandum on the mothballed project is being finalised for release to interested parties soon, possibly within days.
Merchant bank Gresham Partners, a long-time adviser to BHP, is believed to be managing the tender process.
BHP declined to comment when asked to confirm that an Information Memorandum was being prepared or that bids would soon be sought. A spokesman said only that the company was continuing with a "future options study" for the project, which remains in "indefinite suspension".
However, it is understood that a sale is one of the key options being considered, alongside the more remote option of re-opening the operation, and the possible demolition of the plant.
Sources close to the company indicated that issuing a confidential Information Memorandum would neither be untoward or surprising, given the company had consistently stated it would look at all the options.
It is also understood Ravensthorpe was discussed when Premier Colin Barnett and BHP chief executive Marius Kloppers met following the announcement of the company's iron ore joint venture with Rio Tinto.
When BHP announced Ravensthorpe's closure in January, just eight months after it began production, it blamed the deterioration in the nickel market and high additional expenditure required for the plant to reach full production.
However, a heavily discounted sale may provide an opportunity for a new operator to generate acceptable returns based on a significantly lower capital base for the asset.
One senior industry nickel figure, who asked not to be named, said rumours that a sales memorandum was being prepared had been circulating regularly in recent weeks.
It remained uncertain whether there would be serious interest in the asset, however, given estimates that restarting the operation could cost in the vicinity of $500 million.
Even if the asset were given away, the significant liabilities associated with site rehabilitation would be a major concern, and would far exceed the scrap metal value of the facility.
Another senior nickel player said there would always be some interest, given Ravensthorpe remained the world's third largest laterite nickel resource, and the second biggest hydrometallurgical facility.
Industry insiders expect the most likely parties to be interested in the project would be major Chinese groups.
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