The Jinchuan Group Ltd., China’s largest nickel producer, is talking to other local nickel firms for possible joint venture arrangements after failing to clinch a deal with Philnico Industrial Corp. for its planned investments in the Nonoc nickel plant.
Malacañang special envoy on trade and investments to China Francis Chua said there are several nickel operations in the country that Jinchuan can tap into other than Nonoc, the country’s biggest nickel plant. The Chinese firm’s entry into Nonoc failed as discussions became bogged down caused by disagreements on the company’s debt obligations.
Jinchuan also questioned the moral authority of Philnico to negotiate given that it has yet to pay the Philippine government for acquiring Nonoc in the mid-90s.
The Philippines has the third largest nickel deposit in the world. The deposits are found in Palawan, Zambales, Mindoro, Samar, Negros, Surigal del Norte and other parts of Mindanao, which are all in the so-called ophiolite belts.
The proposed revival of the Nonoc mines is one of the projects being eyed by the Chinese as announced by President Gloria Macapagal Arroyo as early as April 2005.
In 2005, Jinchuan, which operates the largest nickel mine in Mainland China, signified an interest to revive the Nonoc nickel mining project, which closed in 1982 because of high energy costs.
Global players in the nickel mining sector in the country include BHP Biliton through the Hallmark Nickel Project (formerly Pujada) in the Pujada Peninsula in Mati, Davao Oriental covering an total area of 11,799 hectares.
BHP reiterated its commitment to invest in the country through the Hallmark Project, and further signified to look for more substantial nickel deposits in the country.
Aside from BHP, the Department of Environment and Natural Resources also identified four other global major players would help boost the development of nickel deposits in the country namely: Chemical Vapour Metal Refining, Inc. (CVMR), Sumitomo Metals Mining Corp. of Japan, Chinese top companies CITIC and Jinchuan Group. CVMR recently set up its Philippine office and formed local subsidiaries to establish mining claims in Palawan, Samar and other potential areas. The Canadian mining giant also plans to put up its own processing plant in the Philippines.
Sumitomo is currently in partnership with local Rio Tuba Nickel Mining Corp. for the operation of the Coral Bay Project, a High-Pressure Acid Leach (HPAL) nickel processing plant in southern Palawan, the first in the country. Currently producing 10,000 tons nickel and 750 tons of cobalt concentrate per year, it is at present undertaking an expansion program that would double its capacity by 2008.
CITIC of China has also set up its local unit and is now involved in mining operations in Dinagat, Siargao Island. Jinchuan is currently negotiating with possible local partners for joint exploration and mine development.
About two-thirds of global nickel metal production is being used in stainless steel production, 10 percent in electroplating, and 20 percent in alloys and coins.
Driven by the increasing prices of nickel metal, Philippine production of direct shipping nickel ore has increased by more than four times from 2004 to 2006. The nickel ore productions were 874,195 DMT in 2004; 1,106,903 DMT in 2005; and 3,576,666 DMT in 2006; with equivalent nickel contents of 16,972 MT, 22,555 MT and 50,637 MT, respectively.
The government envisages a revitalized minerals industry believing that it would serve as a catalyst for development, particularly in the countryside.
Source: Manila Bulletin
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