BHP Billiton chief executive Andrew Mackenzie has for the first time hinted that Nickel West's reliance on third-party ore feed was one of the key reasons the Goldfields division was being jettisoned and will not find a home in its NewCo spin-off.
Much of the speculation surrounding Nickel West's surprise exclusion from the NewCo set-up a fortnight ago had focused on environmental liabilities that are tipped to exceed $1 billion.
But Mr Mackenzie yesterday spoke of a "complex business . . . very integrated with a number of other nickel operations in WA", and hinted Nickel West's "lifetime", based on its and third-party nickel reserves, meant it failed to meet the threshold for inclusion in NewCo.
"Our criteria for the inclusion in (NewCo) obviously were quite demanding," Mr Mackenzie said.
"You know, big enough to be in NewCo but not too big that you would actually seek to retain it in BHP Billiton. And then its lifetime that it could expect from the reserve base it has."
Nickel West's suppliers of high-grade ore - three Kambalda miners and Western Areas - have relatively short mine lives typical of underground operations based on mid-sized orebodies.
Mr Mackenzie said he remained hopeful of selling Nickel West "as a going concern", rather than piecemeal or even considering closure, but accepted the uncertainty was upsetting the division's 1800 staff.
"I know that can't be easy . . . for staff that are wondering about their future livelihood," he said.
Mr Mackenzie would not discuss the sales timetable.
Glencore, China's Jinchuan and trading house Trafigura are considered possible buyers of Nickel West, which comprises mines near Leinster, concentrators, the Kalgoorlie nickel smelter and a refinery at Kwinana.
Nickel West's exclusion means the recently upgraded Worsley alumina refinery in the South West will be the only WA asset owned by NewCo, which will be headquartered in Perth.
NewCo's portfolio will include coal in NSW and South Africa, the Cannington silver-lead-zinc mine in Queensland and BHP's entire manganese and aluminium business, which apart from Worsley is dominated by South African assets. Reflecting NewCo's asset make-up, its board will include Xolani Mkhwanzai (chairman of BHP Billiton South Africa) and ex-Impala Platinum boss Keith Rumble.