TORONTO (miningweekly.com) – The world's biggest miner, BHP Billiton, has agreed to sell its shuttered Ravensthorpe nickel operation in Western Australia to First Quantum Minerals for $340-million.

The agreement is subject to relevant approvals from the Australian Foreign Investment Review Board and the West Australian Minister for Mines and Petroleum and, subject to these approvals, is expected to close in the first quarter of 2010.

The sale "reflects the culmination of a thorough and exhaustive study into a range of future options for Ravensthorpe," BHP's acting president of stainless steel materials, Gerard Bond, said in a statement.

The Ravensthorpe project was completed in 2007 but operations were suspended in January this year after low nickel prices rendered the mine unprofitable.

"We are committed to restarting Ravensthorpe, which we believe we can successfully achieve within a realistic timeframe," said First Quantum CEO Philip Pascall.

"We are confident that our experience from many years of successfully developing and operating complex projects will be invaluable in making this a reality."

TSX- and LSE-listed First Quantum currently produces copper and gold and has mines in Zambia, the Democratic Republic of Congo and Mauritania.

On November 30, the company also announced it has approved the development of its Kevitsa nickel/copper/platinum-group-element project in northern Finland, which it acquired in June 2008 when it acquired Canada's Scandinavian Minerals.

The company also announced last month it plans to buy Zambia-focused explorer Kiwara.

"The acquisition of the Ravensthorpe nickel operation is a major step towards First Quantum achieving its goal of becoming a globally diversified mining company," said Pascall.

"This project, together with the recently announced commitment to build the Kevitsa project in Finland has the potential to make the company one of the world's leading nickel producers."

In its statement, BHP said that the First Quantum proposal was compelling because, in addition to the purchase price, the company has financial and operational capability, and the offer presented "minimal conditionality and immediate acceptability".

Ravensthorpe is an openpit mine and hydrometallurgical process plant that uses proven technology to recover nickel and cobalt to produce a mixed nickel cobalt hydroxide intermediate product.

First Quantum said it expects the asset will produce an average of 39 000 t/y for the first five years after operations restart. Overall, production over the expected 32-year mine life is forecast at 28 000 t/y.

To subscribe to Mining Weekly's print magazine email subscriptions@creamermedia.co.za or buy now.