BHP Billiton PLC (BHPB) announced an agreement to sell its shuttered Ravensthorpe nickel mine to First Quantum Minerals Ltd (First Quantum) on 09 December 2009 for US$340 mn and expects to complete the sale by 1Q 10. We expect the company to report improved production in FY 2010, led by improved demand conditions and start-up of the company's various developmental projects. However, at current price levels, the company's ADR looks fairly valued and we therefore maintain our HOLD rating. We will reassess our ADR rating (1 ADR = 2 UK shares) after the company releases its 1H 10 results in February 2010. We now anticipate a significant negative currency impact on the UK stock over the next 6-12 months. Therefore, we downgrade the UK stock from our previous HOLD rating to a SELL. We will reassess our UK stock rating for BHPB after the company releases its 1H 10 results in February 2010.

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