THE receiver of struggling nickel producer Bulong Nickel has commenced closing down its Goldfields plant, despite flickering hopes of a sale.
THE receiver of struggling nickel producer Bulong Nickel has commenced closing down its Goldfields plant, despite flickering hopes of a sale.
KPMG partner Barry Honey held out a faint glimmer of hope to the 200 staff at Bulong, saying that he was still in negotiations to sell the business to two interested parties.
Heron Resources is understood to be one of the companies interested in acquiring Bulong, to support its planned North Kalgoorlie laterite nickel project.
Heron managing director Ian Buckhorn said “the company has reviewed several strategic advanced stage nickel project acquisition opportunities, including a producing operation, which potentially could strengthen the NKN project”.
The company declined to confirm its interest in Bulong, even though Bulong is the only laterite nickel producer presently for sale.
Mr Honey said his current intention was to wind down the Bulong operation over two to three weeks, after which the plant would be put on a care and maintenance basis.
In the absence of a last minute offer to buy the business, the staff would be made redundant and the company would most likely go into liquidation.
The phased closure was forced on Mr Honey because he did not have sufficient funding for a major maintenance shutdown scheduled for the end of October.
Early this month, the State Government offered to assist Bulong by providing royalty relief to the operation.
The relief would be comparable to that provided to a second laterite nickel
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producer, Anaconda Nickel’s Murrin Murrin operation.
Bulong, Murrin Murrin and a third laterite nickel project, Centaur Mining and Exploration’s Cawse project, had threatened to shake up the world nickel market in the late 1990s.
However all of the laterite projects encountered major difficulties and failed to reach their full potential.
Anaconda Nickel has undergone an extensive operational and financial restructuring and is expected to have a long-term future.
The company will seek shareholder approval to change its name to Minara Resources at its annual general meeting next month.
Centaur was placed in liquidation in August 2002 but the Cawse project remains operational under the ownership of US-based OM Group.
The Australian Securities and Investments Commission launched a formal investigation into possible insolvent trading offences at Centaur. It announced last week it had closed the investigation and decided not to take any further action.
The possibility Bulong traded while insolvent has also been raised.
Bulong administrator Geoff Totterdell of PricewaterhouseCoopers said in the absence of a successful bid for the company, it was most likely that Bulong would be placed in liquidation at the next creditor’s meeting in January.
“Should the company go into liquidation, the possibility of insolvent trading is a matter I would want to look at more closely,” Mr Totterdell said.
In a report to creditors in June, he says: “The solvency position of the company appears to be a grey area from the preliminary investigations and would warrant further analysis by a liquidator to conclude if action against the directors is warranted”.
When the company was placed in administration in May, Bulong’s board was chaired by Coogee Chemicals chairman Gordon Martin.
He was one of six new directors who took over the company in August 2002, when a scheme of arrangement was instituted.
