Philippine nickel company, Platinum Group Metals Corp., is expanding its product line to ensure the continuous operation of two ferronickel smelter plants in the country's Northern Mindanao region.
PGM had to temporarily shutdown its two plants in the region in recent months due to falling nickel prices.
The company might start producing not just ferronickel but also ferroalloys, ferro-chrome, ferromanganese and even calcium carbide as a safety net in the event of a further slide in nickel prices, Platinum Group Vice-President and Chief Finance Officer Raoul Romulo said in a statement.
"This is the strategy that the management is eyeing for the next two years so as to avoid interruption in the smelter operations, as well as in the employment of highly skilled industrial work force in the Cagayan de Oro-Iligan corridor," he added.
"Platinum Group is optimistic that a recovery in metal prices would start by the second half of this year and with stability in fuel prices and power costs, it would be a matter of time for the Iligan and Manticao (Misamis Oriental) plants to churn ferronickel for export sales again," Mr. Romulo said.
He added that the shutdown of their smelting plants had not affected nickel ore shipments.
"The company through its Surigao mine site is eyeing at least one million wet metric tons to 1.6 million wet metric tons of low-grade to high-grade nickel ore for exports to international buyers from Australia, China, Japan and Taiwan," he said.
Mr. Romulo further noted that shutting down and restarting would be costly and the company was conscious of avoiding this in the near term.
All facilities of the company in Iligan City through its subsidiary, Maria Christina Chemical Industries, are under maintenance after being temporary shut down in June 2008.
Data from the Department of Labor and Employment Northern Mindanao showed Platinum Group was among those that had submitted a notice of closure that affected 267 workers.
Reasons cited for the closure were lack of capital and uncompetitive prices of its products, a report from the regional Labor office showed.
A Platinum Group report noted that nickel prices had gone down from $16 per pound two years ago to as low as $4.30 per pound last year.
Mr. Romulo said ferro-nickel, from medium- to high-grade nickel ore, is a major ingredient in the production of stainless steel.
The global economic slump has dampened demand from China, the biggest end-user of ferronickel, resulting in the shutdown of many smelter plants, Mr. Romulo said.
Other major factors affecting ferronickel production are fuel prices and power costs.
Leon M. Dacanay, Jr., regional director of the National Economic and Development Authority, told an economic briefing last week that among the vulnerable sectors in Nor-thern Mindanao are manufacturing, especially industries that depend on foreign sales such as Platinum Group.
Ma. Eliza Pabillore, Misamis Oriental Trade provincial director, earlier said manufacturing companies were not closing their operations, but needed to temporarily stop because of slowing demand in world markets, consistent with what Mr. Romulo said.
She said the temporary shutdowns would allow manufacturers to survive in the long run.
Source: Business World Online
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