NEW DELHI, NOV 17: International mining giant BHP of Australia has decided to abandon its joint venture partnership with state-owned Hindustan Zinc Ltd (HZL). Company sources told PTI that Broken Hill Proprietary Company (BHP) has opted to pull out of its joint venture deal with public sector zinc major as it was unhappy with the progress being made on the exploration front.They also said the partnership with HZL was no longer a priority for the Australian firm as BHP had undertaken a worldwide restructuring exercise. BHP's joint venture with the zinc major is one of the targets of this restructuring drive. Worldwide international mining have of late been downsizing their operations as a result of the sharp fall in metal prices witnessed over the past two years.In fact, BHP had last year mothballed its copper operations in the United States as a result of copper prices reaching an all time low of around 1300 dollars to a tonne on the London Metals Exchange (LME).Sources said the partners were busy drawing up as engagement contract which would be finalised by the end of this year paving the way for the exit of BHP from the joint venture.They added that HZL was likely to impose stiff conditions on BHP before enabling its exit from the business, one of them likely to be that BHP would not be able to transfer the mining data to a third party to enable it take advantage.HZL was also likely to approach the state government to transfer the prospecting license from the JV to HZL so that it could go ahead with future prospecting and development of the area. HZL had in turn decided to go it alone for the time being as far as this venture is concerned.The disengagement contract would also incorporate a clause for denying BHP the right to stake claim for either the prospecting license or the mining lease for the same area. The Australian company currently holds a 50 per cent stake in the JV which will be picked up by the zinc major.BHP is learnt to have incurred a cost of five to six million dollars on the entire project as a result of a clause which said BHP would foot the cost till such time that a discovery was made.Incidentally HZL is up for sale with the government deciding to reduce its stake from the current 76 per cent to 49 per cent through a strategic sale. The remaining 24 per cent is currently being held by the public at large.BNP-Paribas of France is the front runner in the race for appointment as global advisor followed by HSBC and Rothschild of United Kingdom.
