Western Mining, which owns the controlling stake in the venture, has pre-emption rights to buy BP's stake and had 90 days to match an offer from Minorco. Its decision means that Minorco, which reached a similar agreement to buy BP's stake last November, will no longer be able to go ahead with the proposed deal.
The sale is part of the oil giant's massive disposal programme, under which it has pledged to raise up to pounds 1.5bn from asset sales this year to reduce its dollars 11bn debt mountain. Analysts estimate that BP has already reached about half its sale target for this year following yesterday's move.
Olympic Dam is one of BP's few remaining interests in mining following the pounds 2.4bn disposal of its minerals business to RTZ Corporation in 1989.
BP's remaining mining interests include a 50 per cent share in Sangatta, an Indonesian coal project.
BP is expected to incur a significant book loss on the sale of Olympic Dam, although this has already been provided for in last year's results. BP has invested about dollars 700m in the venture since acquiring the stake from Western Mining in 1979.
Olympic Dam is one of Australia's biggest copper, gold and uranium mining projects, producing more than 62,000 tonnes of refined copper and 1,400 tonnes of uranium in the year to last June. The venture is expected to boost its production to 150,000 tonnes of copper and 4,000 tonnes of uranium over the next few years.
BP Chemicals yesterday said that it was planning to make another 1,500 job cuts this year as part of a continuing cost reduction programme.
The cuts, expected to come largely from a disposal programme, are part of a 50 per cent jump in productivity gains the division plans to achieve by 1995.
The division, which made a pounds 60m post-tax loss in 1992, is planning to raise dollars 600m from asset sales in the next few years. It experienced a cash outflow of dollars 219m last year against dollars 725m in 1991 but is expected to stem the drain this year.
Bryan Sanderson, chief executive of BP Chemicals, said that the company was in talks with several petrochemicals groups aimed at rationalising chronic overcapacity in the industry.Reuse content