Despite higher volume of shipments, the country’s biggest nickel producer on Thursday reported a 20-percent drop in value of nickel ore shipments in the first half of the year because of lower metal prices and saturated supply of processed nickel in the world market.
In a disclosure to the Philippine Stock Exchange, Nickel Asia Corp. (NAC) said that its four operating mines sold an aggregate 5.54 million wet metric tons (WMT) of nickel ore in January to June, or 10 percent higher compared to 5.02 million WMT a year ago.
The estimated value of shipments for the first half of 2013 amounted to P4.14 billion, or 20.07 percent lower compared to the P5.18 billion recorded during the same period last year.
“We remain in a low price environment on account of slow worldwide economic growth, and a growing supply of processed nickel coming from newly commissioned projects,” said Gerard Brimo, NAC president and chief executive officer.
He, however, said that demand for some ore types continue to do well, adding that the company is pleased to see continued growth in shipment volumes.
During the period, the realized average price was pegged at $7.54 each pound payable nickel on 1.97 million WMT of ore sold on the basis of London Metal Exchange prices, compared to the $8.60 each pound a year ago.
The balance of the shipment was sold on the basis of a negotiated price per WMT of ore, which averaged $20.14 per WMT of ore, compared to $26.41 per WMT in 2012.
NAC’s Rio Tube mine, which accounted for 53 percent of the total ore shipments, has transported 1.07 million WMT of saprolite ore and 1.87 million WMT of limonite ore—with majority of the limonite ore going to the adjacent Coral Bay nickel processing plant.
The company’s Taganito mine shipped a total of 675,000 WMT of saprolite ore and
402,000 WMT of limonite ore that includes the initial delivery of 32,000 WMT of limonite ore to the Taganito HPAL facility, which has started and undergoing testing and debugging procedures.
Meanwhile, NAC’s two other operating mines, Hinatuan and Cagdianao, started shipments in March and April, respectively, following the end of the rainy season.
Hinatuan mine shipped a total of 1.33 million WMT of limonite ore and 14,000 WMT of saprolite ore; while Cagdianao mine shipped a total of 137,000 WMT of limonite ore and 41,000 WMT of saprolite ore.
Brimo said that the commissioning of the new Taganito HPAL facility is proceeding well and commercial production is expected to begin in the fourth quarter of 2013. The plant is expected to operate at 30,000 metric tons (MT) capacity of contained nickel, and 2,600 MT of contained cobalt per year in the form of mixed sulfide products starting 2014.
Taganito mine will supply all of the limonite ore for the plant.
James Konstantin Galvez