Nickel Asia Corp. (NAC) and DMCI Mining Corp. said on Wednesday that they study the feasibility to develop a nickel processing factory in the country.
This is because the government is considering a ban on rough nickel exports to stimulate domestic processing.
In a joint statement, NAC and DMCI -Mijnbouw said that they signed a memorandum of understanding (MOU) “to investigate the feasibility of developing and exploiting a nickel processing factory in the Philippines.”
Under the MOU, it is expected that NAC will offer its expertise in nickel processing technology and exploration, while DMCI -MIDBouw will contribute new assets and bring the experience of the parent company in construction and engineering.
In the next two to three years, NAC and DMCI -Mijnbouw “will evaluate suitable technologies, identify an optimal site and secure a stable ore stock.” However, this depends on the approvals of the regulations.
Both companies also agreed to discuss the stock structure of a possible joint venture for the development and operation of the nickel processing factory.
The planned nickel processing factory would process low nickelers that is currently not viable for export, “maximizing the mineral resources of the country, generating new opportunities and stimulating the local nickel industry,” they said.
Despite the current oversupply of Nikkel, NAC president and chief executive officer Martin Antonio G. Zamora said that the future is ‘rosy’, because the demand is driven by the electric vehicle and stainless steel markets.
“Setting up an economically viable nickel processing factory in the Philippines requires various factors to adjust, including clear instructions and regulations of the government, but proactive preparation is crucial. With the important nickel and complex logistics challenges to navigate, early planning is essential for long -term success, “said Mr. Zamora.
Tulsi Das C. Reyes, president of DMCI Mining, said that the project is “a step towards creating jobs and the sustainable use of our mineral resources.”
“By laying the foundation early, we can help position the Philippines as an important player in the global nickel -supply chain,” said Mr. Reyes.
NAC is owned by the Van Manuel B. Zamora family and is a listed diversified development company for natural resources. The mines produce Saprolieterts, which is used as feed for iron smelters from Ferronickel and nickel in Japan and China, and Limonieterts.
DMCI-Mijnbouw is a complete subsidiary of the Consunji-conducted listed company DMCI Holdings, Inc. It has assets in Palawan and Zambales and mainly exports nickel to China and other markets.
On Wednesday, the shares in NAC rose 0.85% to close on P2.37 each, while shares in DMCI holdings rose by 0.71% to each close to P11.30.
“The deal is a good signal about the further integration of the downstream industry of the mining building, in particular for mineral processing/melting/refinery, similar to what encourages Indonesia when the latter prohibits the export of mineral ores,” said Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort in a Facebook knifeer -chat.
“The preparations are awaiting the approval of the Senate Act by law.”
Last month, the Senate approved the third reading of a bill with a provision that prohibits raw mineral exports after five years to give time for miners to build processing factories.
The congress is expected to approve the report of the Bicameral Conference Committee when the session will resume in June.
AP Securities, Inc. Research head Alfred Benjamin R. Garcia said that the NAC-DMCI mining deal was interesting, especially with the proposed ban on the export of raw nickelerts.
“However, it is a bit of a strange move for Nickel Asia, especially because they recently sold their interest in the Coral Bay Nickel Processing Facility because of the losses that are made,” said Mr Garcia in a Viber -Boodschap.
“It would be interesting to see how the two companies would develop a more cost -efficient facility that can operate profitably, even if the nickel prices remain low,” he added.
Mr. Ricafort said that high electricity costs in the Philippines are risks for the project.
“Capital -intensive nature of investments would be realistic of some time to determine,” he added.
Investment analyst Terry L. Ridon said that the proposed facility should process both nickel with high and low grade “to maximize the value potential of our nickel products.”
“In order to make the country work a more important part of the EV battery-supply chain, the most important focus of every local nickel processing factory must be the processing of high-quality nickelerts,” he said via Messenger Chat. – Kyle Aristophere T. Atienza