Advertisement

Sirius to sell nickel to BHP

Sirius Resources managing director Mark Bennett on the site of the proposed processing plant at the Nova project. Picture: Peter Klinger/The West Australian.

Undeterred by the uncertainty surrounding Nickel West's future, Sirius Resources has agreed to sell nickel sulphide concentrate to the BHP Billiton subsidiary.

Under plans announced this morning, Sirius will supply half of its forecast 26,000 tonne a year production from the Nova operation east north-east of Norseman to Nickel West's concentrator at Kambalda.

The deal will kick in late next year when Nova's $443 million construction is due to be completed.

Sirius said it expected to sign offtake deals for the rest to Nova's nickel concentrate by the middle of this year.

The company said it was also in talks with an unnamed party over Nova's copper sulphide concentrate production, slated to be 11,500tpa.

The Nickel West deal is for three years and will run close to what many in the industry consider to be the BHP division's final days. Limited organic nickel resources and a big looming capital expenditure bill to upgrade the Kalgoorlie smelter have turned Nickel West into an outcast division within BHP. A sales process last year failed to find a buyer, and it is possible BHP will aim to shut Nickel West by the end of this decade when various concentrate supply deals, such as the one with Sirius but also existing terms with the likes of Western Areas, expire.