This is quite a common weak spot on 2001-2006 R50/52/53 MINI's particularly the earlier ones. The clunk or clicking noise when turning the wheel in low speed situations such as parking can be caused by a failed or dry bearing and/or rotary coupler in the upper steering column assembly. The rotary coupler is the part that allows all the wiring coming from the steering wheel (Airbag, stereo controls, cruise control and horn wires) to rotate when the steering is turned and to keep all the cables in place inside the column.
Greasing the upper column bearing as described below is well worth trying however as it very often fixes the problem especially if done regularly, say once or twice a year.
MINI in early 2003 issued a new revised upper steering column / rotary coupler assembly with new part numbers. NOTE: If you have a 2001/2002 MINI both upper and lower steering column assemblies MUST BE REPLACED as the new upper column is not backwards compatible with the old lower steering column assembly (Differences in the splines). There has been at least one case where a mechanic failed to do this and the steering wheel eventually lost any connection to the front wheels! Also if you have an Auto the steering column is different from manual models due to the electric shift lock feature. The repair / fitting takes about 2-3 hours garage labour and the approx. parts prices from BMW are Upper column £163 +vat, Lower column £73 + vat (Total parts £280 approx. inc. vat @ 2009 prices). Dismantling and fitting is detailed for DIYers in the MINI Haynes or USA Bentley MINI manual. Despite the modified parts it is not uncommon for later post 2003 columns to start clunking!
I just spray grease mine on an occasional basis (out of warranty) but will replace the actual bearings as described below if it gets any worse.
Greasing Method: If you remove the 2 screws that hold the lower plastic shroud of the column, then drop it down a few mm, remove the rubber off the ignition barrel (makes it easier to put back on) the plastic lower column cover clips came apart easily with a flat bladed screwdriver. Release the steering adjuster lever and manouvre the plastic off, will be a little tight around the barrel but should slide off with no damage. Under there you will see the column shaft + ball bearing race to spray the grease into, (see picture below).
Although not officially recommended it is possible to dismantle the column assembly and just replace the noisy bearing, (Part Number is NSK Bearing 6905). These replacement bearing can be supplied with rubber seals on them so no foreign objects can enter unlike the original exposed bearing cages and cost around £15. http://simplybearings.co.uk/shop/adv...FQrAGgodjEMN1w Its not always easy to press the bearing out if you dont have the right tools and some mechanical knowledge so you may prefer to pull the column out and take it to a mechanic or engineer to replace the bearings. See photo above and diagram below of the column with the bearing arrowed.
Also a useful Link below to replacing the key cylinder lock barrel:Procedure to remove ignition lock barrel and get at tumblers