UPDATE: Bids For BHP's Ravensthorpe Mine Due Nov 25 -Sources

Final bids for BHP Billiton Ltd.'s (BHP) failed Ravensthorpe nickel operation in Western Australia are due Nov. 25, two people familiar with the situation said Friday.

Australia's Minara Resources Ltd. (MRE.AU) as well as Poseidon Nickel Ltd. (POS.AU) and China Metallurgical Group Corp., or MCC, remain in the running to take over the idled nickel laterite operation, another two people familiar with the bidding process said.

BHP declined to comment on potential bidders but said the operation continues to attract "considerable interest".

BHP has said it's evaluating divestment, restart or closure options, adding that "a formal evaluation of the divestment as an option is progressing well and as planned."

"MCC, Poseidon and Minara remain in the bidding," one person said, but he also flagged interest from other companies, without elaborating.

However, Poseidon moving ahead seems doubtful because of its small size and the participation of MCC in the bid.

One person familiar with the deal said Poseidon had been seeking Chinese backers for its bid, but that it now seemed unlikely that another Chinese state-owned enterprise would enter the final stages of the sale process and compete with MCC.

Poseidon has a market capitalization of A$43.3 million, compared with Minara at A$969.3 million, in addition to having a weighty backer in the form of international commodity trader Glencore International AG (GNC.YY) with a shareholding of 70.6%.

Minara operates the Murrin Murrin laterite nickel mine in Western Australia, using a high-pressure acid leach process.

Up to now, MCC's activities in Australia have been largely confined to the iron ore sector, in particular its purchase last year of the Cape Lambert Iron magnetite project in the Pilbara region.

But further to the north, in Papua New Guinea, MCC operates the US$1.4 billion Ramu nickel venture, which is due to finish construction by the end of the year. Forecast to produce 31,150 metric tons a year of nickel, Ramu is also a high-pressure laterite processing venture and MCC could use expertise gained in its construction to speed up the revamp of Ravensthorpe.

BHP closed the US$2.1 billion mine in January, only eight months after it was commissioned, because it struggled to achieve the production needed to turn a profit.

Nickel laterite mines are much more costly and complicated to operate than sulfide ore bodies, and BHP commissioned Ravensthorpe at a time of plummeting nickel prices.

Earlier this month, China's Jinchuan Group exited from the bidding process, as did Australian mining magnate Clive Palmer.

Minara has confirmed its participation in the sale. A spokesman for Poseidon, chaired by Fortescue Metals Group Ltd. Chief Executive Andrew Forrest, declined to comment.

Forrest has experience with challenging nickel laterite projects, having headed troubled miner Anaconda Nickel, which was later revived as Minara.

At a Sydney Mining Club lunch Thursday, Forrest declined to confirm a bid by Poseidon, but went on to say he expected Ravensthorpe "to succeed eventually" and "to be purchased."

BHP has written the value of the operation down to zero, and there is disagreement in the market about how much BHP can hope to sell it for. Estimates range up to US$200 million, while others say BHP will be forced to accept a nominal amount as any buyer would be taking on so much expense and risk in restarting the failed operation.

-By Elisabeth Behrmann & Alex Wilson, Dow Jones Newswires;

61-2-8272-4689 elisabeth.behrmann@dowjones.com

(Stephen Bell in Perth contributed to this article.)

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