BHP reassessing value of nickel unit after price slump

(Sharecast News) - Australia's BHP Group said it may have to write down the value of its nickel operations after a price slump in the commodity. Prices fell last year after an increase in supply from Indonesia. Nickel is a key product used in manufacture of electric car batteries.

In a second-quarter production update, BHP said it was studying options to mitigate the impact of the price fall, with more details expected at half year results on February 20.

"The nickel industry is undergoing a number of structural changes and is at a cyclical low in realized pricing," the world's biggest miner said.

"Given the market conditions, a carrying value assessment of the Group's nickel assets is ongoing."

BHP also posted a 2.2% fall in second-quarter iron ore production that was in line with analyst forecasts as it ties in its rail line to a central production hub in the Pilbara region of Western Australia to 72.7 million metric tonnes in the three months to December 31.

Copper output was 4% lower at 457,000 tonnes mainly due to lower concentrator grades at the Escondida mine in Chile.

Reporting by Frank Prenesti for Sharecast.com