Miner Global Ferronickel Holdings Inc. expects nickel output to increase by 20 percent to 6 million metric tons (MT) next year when its Palawan site commences operations.
The Palawan operation is expected to produce 1 million MT of nickel and further boost the 5 million MT Global Ferronickel producing from Surigao del Norte.
This year, the miner expects to ship 5 million MT of nickel ore.
Dante Bravo, Global Ferronickel President, said that the firm is now preparing the Palawan mine for next year’s and is spending $10 million for ground works.
“The new mine will be producing predominantly high-grade and medium-grade nickel ore, with a shipping window that complements that of our Cagdianao mine to make us a year-round producer,” said Joseph Sy, Global Ferronickel chairman.
The company is waiting for nickel demand to pick up and for metals prices to rise, Ramon Peter Adviento, Global Ferronickel senior vice president, said.
“Because you have this Brexit and other developments like the still weak US market that weakens the dollar and even the weak Euro so there is lesser momentum,” he said.
LME nickel hit a low of $7,560.50 per ton on February 11, 2016, the lowest in the last 10 years. It has since bounced back to $9,293.50.
“… The World Bank and the International Monetary Fund are predicting LME nickel prices to reach as high as $10,700 within 2016,” Adviento noted.
The projected increase in nickel demand is coming from lower supply. Top nickel producer Indonesia is holding off its supply.
Global Ferronickel expects to ship 5 million metric tons of ore this year, mainly to Chinese smelters.
Among the shipment contracts sealed by the company covers Tsingshan, whose processed nickel output has been used to build China’s first aircraft carrier. Tsingshan has committed to by 2.5 million WMT (wet metric ton) of nickel ore.
Baosteel, an iron and steel conglomerate, has placed an order for 1 million WMT. Shanghai International Trade also has an order of 1 million WMT.
Global Ferronickel posted a net profit of P1.112 billion last year, down 76.96 percent from P4.817 billion last year.