Baiyin mulls investing up to $700M in PH stainless steel plant
AS part of the effort to boost economic collaboration between Manila and Beijing, the Philippines’ second largest nickel producer on Friday signed a long-term strategic partnership agreement with China state-owned enterprise Baiyin Nonferrous Group Co., Ltd.
The signing of the memorandum between Global Ferronickel Holdings, Inc. (FNI) chairman Joseph Sy and Baiyin chairman Liao Ming was held during President Rodrigo Duterte’s state visit.
“We recognize the importance of promoting close cooperation with China to spur economic growth in the country. We see Baiyin as a strong partner who will play a vital role with us in creating greater value added in the nickel value chain in the Philippines,” Sy said in a statement.
Pursuant to the agreement, FNI and Baiyin intend to develop a long-term strategic partnership and work closely together in evaluating the economic feasibility of various natural resources projects in the Philippines, including but not limited to providing trade financing to the operations of FNI’s Ipilan mine in Palawan.
Also, FNI and Baiyin will cooperate and evaluate investments in value-added downstream projects in the Philippines.
This includes evaluating the feasibility of constructing an integrated 200-series stainless steel plant in the Philippines with an annual capacity of one million tons using lower-grade nickel ore sourced in the Philippines (an estimated total investment of around $500-$700 million).
Liao said Baiyin is looking forward to a long and mutually beneficial partnership with FNI, noting that both companies recognize the economic benefits of a partnership arising from the availability of low-cost nickel ore in the Philippines, for which FNI is a key supplier to major customers in China.
Baiyin has a total asset value of over RMB45 billion ($7 billion), and has produced over 5.5 million tons of base metals over the past six decades.
The key stakeholders of Baiyin are the State-Owned Assets Supervision and Administration Commission of Gansu Province and CITIC Guoan Group. Baiyin is one of the largest producers of non-ferrous metals in China.
Baiyin Group is focusing on building a tier 1 international resources company and has successfully developed mining investments in South Africa, Peru and the Democratic Republic of the Congo.
FNI is the largest single lateritic mine exporter in the world, and is one of the lowest-cost producers of nickel ore in the Philippines. Its operations in Cagdianao, Surigao del Norte received ISO 14001:2015 Environment Management Systems Certification and passed the recent audit of the Philippine Department of Environment and Natural Resources.
Its Ipilan mine is expected to begin production in 2017.
China has a large and growing demand for nickel ore, which is a key ingredient in its production of stainless steel, coins, rechargeable batteries and special alloys. China is also the largest consumer of nickel in the world, accounting for around 50 percent of world consumption.