BHP Billiton Limited (BHP) said it had agreed to off-load its Yabulu nickel refinery to Professor Clive Palmer for an undisclosed sum. BHP Billiton, while withholding the terms of the sale said it would write-down the carrying value of Yabulu by around US$500 million, with a further estimated US$175 million of unrecoverable tax benefits.

These write downs will be reported as exceptional items in the results of the group for the year ended 30 June 2009, although the miner said it didn’t expect the sale to be finalised until around the end of July.

BHP Billiton said it would ensure that, upon completion of the sale, working capital and access to funds would enable the refinery to commence as a going concern.

BHP Billiton Stainless Steel Materials President, Jimmy Wilson, said the result reflected the commitment of both Professor Palmer and the Queensland Government to the continued operation of the refinery.

“The Premier of Queensland played a pivotal role in ensuring the change in ownership was feasible for both parties to this transaction, in affirming that the continued operation of the refinery was important to Queensland and that there would be no change in licensing or other arrangements from that currently prevailing,” Mr Wilson said.

On 21 January this year BHP said would start ramping down and indefinite suspension of the Ravensthorpe Nickel Operation, and as a consequence, Yabulu would cease processing mixed nickel cobalt hydroxide product from Ravensthorpe and will revert to processing ore only.

At the time, BHP said uncertainty over the prospects for the nickel market the cost of maintaining the plant as reasons for the move.

BHP Billiton wrote down the carrying values of the Ravensthorpe and Yabulu operations by US$1.2 billion.

At 1031 AEST, BHP shares were down 2.8% to $33.34.