BHP writes down value of Australian assets after nickel price collapse
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The mining giant is struggling to compete with a flood of cheap shipments from Indonesia.
PHOTO: REUTERS
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Sydney – Mining giant BHP wiped billions off the estimated value of its Australian nickel operations, as it struggles to compete with a flood of cheap shipments from Indonesia.
The Anglo-Australian company said it is writing down its assets in Western Australia by about US$2.3 billion (S$3.1 billion), citing “current market conditions”.
Nickel is essential to the manufacture of stainless steel and batteries that are fuelling the world’s transition to greener energy.
But the nickel market has been upended by a surge in exports from Indonesia – enabled by massive Chinese investments and a revolution in refining techniques that allow low-quality nickel to be used in batteries.
Prices have fallen about 40 per cent in the past year alone, prompting many once-dominant firms to rethink projects or write down the value of their assets.
“The nickel industry is facing challenges and there has been a sharp fall in prices,” BHP said in a filing with the Australian Stock Exchange on Feb 15.
“The supply of nickel from Indonesia significantly increased and the London Metals Exchange began accepting Indonesian-origin nickel products.”
“These unfavourable operating conditions are expected to endure for a considerable time,” the firm added.
BHP rival Glencore recently announced that it is looking to offload its stake in a large nickel mine in New Caledonia. AFP
