BHP says no change to Australian nickel operations

By James Regan

SYDNEY, Aug 20 (Reuters) - BHP Billiton Ltd/Plc, the world's third-biggest producer of nickel, is not planning any changes to its Australian nickel-making operations, a company spokeswoman said on Wednesday, despite declining world prices for the metal.

Analysts have predicted a slew of closures in the sector in response to sagging prices for the stainless steel alloy, which are down around 60 percent from record highs above $51,000 a tonne ($23 a pound) 15 months ago.

BHP (BHP.AX)(BLT.L), which in June idled its Kalgoorlie nickel smelter and Kwinana refinery in western Australia for four months of repair work, was operating its mines and other processing facilities as normal, the spokeswoman said.

"We are not considering any changes to our operations," she said.

Steady declines in nickel prices are heightening pressures on miners to close unprofitable operations, said DJ Carmichael & Co analyst James Wilson.

"At $8.90 a pound, nickel is looking a lot worse for wear. If you're a high-cost, low-margin producer, which a lot of the miners outside of Australia are, you'd be looking at tough times ahead," Wilson said.

The weaker Australian dollar, down 10 percent against the U.S. dollar since mid-July, is also seen helping insulate Australian mining operations from the worst of the rout caused by tumbling prices.

Another big producer, Xstrata Plc (XTA.L) said on Tuesday it was suspending its Falcondo ferronickel mining operation in the Dominican Republic. [ID:nLJ323673]. The move effectively takes about 10,000 tonnes, or less than 1 percent of nickel out of the global supply pool.

But BHP Chief Executive Marius Kloppers on Monday said the nickel market looked "manageable." ($1=A$1.15) (Reporting by James Regan; Editing by Ben Tan)