SYDNEY, Oct 20 (Reuters) - BHP Billiton's BHP.AX BLT.L nickel business, which faced closure after failing to attract a buyer, is spending $2 million a month on improvements and making headway to extend operations through the next decade, a senior executive said on Thursday.
Nickel prices have climbed 17 percent this year after a crippling supply glut drove the market into near-free fall 2-1/2 years ago. Global demand rose 6.1 percent over the eight months to end-August, led by an 8 percent rise in China and strong gains in India and China, industry data showed. are signs that this year could finally be the turning point for nickel," Eduard Haegel, president of BHP's Nickel West mining and processing unit told a mining conference.
"For the last 10 months and for the remainder of this year and next year, Nickel West is committed to spending $2 million a month," Haegel added, with the funds being used to address structural needs.
He also flagged a potential return to the development of a promising but as-yet unexploited mine named Yakabindie, stalled since the 2008/09 financial crisis because of its $1.1 billion price tag.
The new mine is believed to hold 350,000 tonnes of nickel - a fifth of annual world demand - and would help support Nickel West until at least 2032, Haegel said.
It was less than two years ago that 2,000 Nickel West workers were told to expect operations at the 44-year-old plant in western Australia to end by 2019 after the high-cost, low-grade operation failed to find a buyer.
In 2013, BHP booked a $1.25 billion after-tax impairment on the assets. Nickel West has since been designated "non-core" by BHP's board.
Potential buyers including Glencore GLEN.L , First Quantum FM.TO and China's Jinchuan Group JCGRP.UL walked away two years ago, put off by plummeting nickel prices and fearful of being left with $1 billion-plus in closure costs.