THE country’s oldest ferronickel smelter, MCCI Corp., expects the rehabilitation of its smelting facilities in Cebu, Iligan City and Misamis Oriental to go full swing in the next few months, after it signed a financing agreement with a Wall Street investment bank.
Through its US associate investment and management firm Trebor Resource Management Group Inc., MCCI has engaged The Benchmark Co., a Wall Street investment bank, to raise up to $100 million from various lenders in the US, proceeds of which will be used to finance its capital expenditure program.
Venture capital firm 7bridge Capital Partners Ltd. assisted Trebor in structuring the agreement with Benchmark.
Once the rehabilitation is completed in the fourth quarter of 2015, production capacity at the three smelting plants will increase to 250,000 metric tons of ferronickel and nickel pig iron.
Part of the capital raised will be used to enter into partnerships for the acquisition and development of additional nickel mines to ensure its supply of nickel ore for its smelters.
Ferronickel and nickel pig iron are value-added products that are used primarily in the production of steel products with strong demand in the international market.
For this reason, MCCI has steered away from the traditional export of raw nickel ore and has been using its smelting facilities to develop ferronickel and nickel pig iron production technology over the last five years.
MCCI said it has successfully completed initial production trials that have been tested and accepted by its China customers.
The production of nickel metal in the form of ferronickel and nickel pig iron is a significant value addition in the utilization and optimization of the country’s mineral resources. It also reduces the country’s dependence on the shipping of low-value, high-volume nickel ore to China.
It is expected that the labor component for the metal production will increase significantly as the development of downstream value addition becomes viable from the domestic production of nickel ore.
Currently, all steel and stainless steel products are imported into the Philippines despite the country being rich in the basic minerals used to manufacture this product.
Indonesia’s ore export ban follows the same principle, which has forced many Chinese smelters to plan the investment and construction of nickel pig iron plants in Indonesia to ensure that their nickel metal supply for their stainless steel manufacturing industry is not compromised.
China is heavily dependent on ferronickel and nickel pig iron for its stainless steel manufacturing industry.
Meanwhile, MCCI said it is also in the process of studying the viability of construction of a dedicated 160-megawatt power plant to ensure power supply to sustain its smelting operations in Mindanao.