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ORIENTAL Peninsula Resources Group said it will put
up a pure nickel smelting plant in Palawan within the next three to
four years to improve its margins.
Caroline Tanchay, Oriental
Peninsula chairman and president, said the company cannot push
through with the plant construction this year since it has to study
whether it can build the facility by itself or with a partner.
The company requires $300 million
for the smelting plant, which would enable the mining firm to
produce and sell pure nickel, which fetches higher prices than
nickel ore abroad, Tanchay said. Pure nickel sells for $26,000 to
$28,000 per ton abroad whereas nickel ore is priced at $25 to $100
per ton.
The Oriental Peninsula executive
said the funds to build the plant would come from nickel ore sales,
foreign debt and fresh funds from a possible partner.
For next year, the mining firm
plans to acquire additional mining assets or consolidate mining
tenements. Oriental Peninsula is also looking at shipping 600,000
tons of nickel ore, raising this to 1.5 million tons in 2009.
Tanchay said its mining site in
Española, Palawan, can produce nickel ore considered Japan-grade,
which should have at least 1.8 percent nickel content, and would be
shipped to China, Australia and Japan where nickel smelters are
located.
The company recently completed
its maiden share offering, raising about P804 million after selling
300 million shares at P2.68 each. The total number of shares sold
represent at least 20 percent of the company.
About P246.75 million of the
proceeds will be used to buy capital equipment and machinery while
P100 million is earmarked as pre-operating capital. Another P78
million will be used for infrastructure development and P58 million
will go to civil structure costs for the mining operations.
Earlier, the company disclosed
that the initial public offering was almost two times oversubscribed
with Asian Alliance Holdings Corp. serving as the sole issue manager
and underwriter. On its debut at the Philippine Stock Exchange,
Oriental Peninsula’s shares opened up 17.5 percent to P3.15 from
its offer price and traded between P3.00 and P3.30 before closing at
P3.20 per share on Wednesday.
--Likha C. Cuevas-Miel
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