BHP Billiton (LON/ASX/NYSE:BHP) took Monday another step away from resource expansion in Australia, particularly in the uranium sector. The world's number one miner announced it's selling one of the country's largest undeveloped deposits of the yellow element to Canadian Cameco (TSX:CCO) (NYSE:CCJ) for $430 million.
The decision of scrapping Yeelirrie uranium deposit in Western Australia, which is subject to regulatory and state government approval, comes just days after the miner announced it was delaying its Olympic Dam copper and uranium project.
BHP justified the resolution by saying it doesn't want mines that are focused on uranium only, as it continues to look for ways to conserve cash and adjusts its development plans. Last week, the company published its first decrease in annual profit in three years, amid a slump in commodity prices that has shaken the global mining industry.
Cameco, in turn, said that while it expects the transaction to close by the end of this year, it is highly improbable it will gain the needed approval for Yeelirrie or its other deposit at Kintyre before the next election. As for that election, the ruling Labor party has repeatedly said if it wins, it won't approve any new uranium mines.
"Yeelirrie represents an attractive deposit that fits well with Cameco's vision and corporate strategy," said Cameco's president and CEO Tim Gitzel in a statement. "We are pleased to add this promising deposit to our suite of uranium assets and look forward to advancing this property through our process for assessing development projects."
BHP, which has more than 40,000 employees and operates in dozens of countries, has recently scaled back or postponed several expensive expansion projects, including the Olympic Dam mine in South Australia and Escondida in Chile. However, it said it still stands by its proposed Canadian Jansen potash mine.