UPDATE 2.20pm: Shares in BHP Billiton rallied today after the mining giant abandoned plans to sell its Nickel West and WA alumina assets, saying it would instead pursue a de-merger.
Under the de-merger plan, BHP's so-called "non-core" mining assets would be spun off into a separate vehicle.
BHP chief executive Andrew MacKenzie has long flagged his desire to slim down the global mining giant as part of a “four pillars” strategy, and potential buyers have been running the ruler of BHP’s major non-core assets, including WA’s Nickel West business and the Worsley alumina refinery, for the past few months.
But uncertainty over the future profitability of Nickel West in particular, despite the recent resurgence in the nickel price, meant BHP was unable to find a buyer at the right price.
The company said today it preferred a de-merger strategy for the assets.
That means the ASX could see a major new resource house floated by the end of the year, with the new vehicle likely to contain Nickel West, the Worsley alumina refinery and associated assets, some of BHP’s lower tier coal assets, plus its Queenland base metals projects and coal and alumina mines in South Africa.
It is unclear whether BHP’s WA petroleum assets would also be on block.
BHP is expected to flesh out its de-merger strategy at its annual financial results announcement on Tuesday.
BHP shares closed up 89 cents, or 2.33 per cent, at $39.05.