|China's MMG in deal to sell long-idle Australian nickel mine
China's MMG Ltd on Wednesday said it will sell its long-idle Avebury nickel mine in Australia to a private exploration company for A$25 million ($19.19 million).
The sale, which MMG expects to finalise by the year-end, requires Australia-based Dundas Mining to pay a deposit of A$1.5 million. According to MMG, the sale agreement will be completed only when the full payment is done.
The deal comes amid concerns over global supply of the metal after the Philippines said 20 more mines may be suspended for environmental violations, threatening supply from the world's top nickel ore exporter. MMG, which has been trying to sell the 7,000-tonnes-per-year mine in Tasmania state since 2009, said the sale offers the best hope of operations restarting.
"Following an internal review, MMG initiated an expression of interest process for the asset and believes that this transaction provides the best opportunity to restart the mine," MMG said.
MMG put the mine on the block after acquiring it in a takeover of Oz Minerals in 2009.
It halted operations shortly afterwards as the cost of mining nickel exceeded the going price at the London Metal Exchange. This week, the LME three-month nickel price traded for around $10,600 a tonne , roughly the same price as in 2009.
Plans to sell the mine in 2014 to another Australian private firm for A$40 million collapsed before the deal got finalised.
MMG is the Hong Kong-listed arm of state-owned China Minmetals Corp.
($1 = 1.3031 Australian dollars)