• Philex, NAC report profit drops


    Two major mining firms reported significant drops in their incomes for the first nine months of the year.

    Philex Mining Corp. on Wednesday said that its net profit declined by almost a third in the first nine months of the year, as lower metal prices weighed on its bottom line despite higher production.

    Meanwhile, the country’s biggest nickel producer, Nickel Asia Corp. (NAC), also on Wednesday said its net income dropped by almost a fourth in the first nine months of the year because of lower metal prices in the world market.

    In a disclosure to the Philippine Stock Exchange (PSE), Philex said that its profit was reduced to P1.446 billion in the period January to September 2013, or 28.94 percent lower than the P2.035 billion recorded in the same period last year.

    The Benguet-based gold and copper producer and its subsidiaries also reported lower core income of P1.479 billion for the nine-month period ended September 30, or a 35-percent decline from last year’s level.

    Philex said that its Padcal mine in Benguet province milled a total of 5.45 million tons, producing 23.78 million pounds of copper and 72,905 ounces of gold, which is 7 percent and 2 percent higher, respectively, over the same period last year.

    But the global downtrend in metal prices resulted in a 35-percent decline in income from operations to P2.32 billion in the first three quarters of 2013. With gold price lower by 18 percent at $1,340 per ounces, operating revenue from the yellow metal decreased by 16 percent to $4.17 billion.

    Copper prices, on the other hand, were down by 19 percent to $3.26 each pound, cutting revenues from copper by 15 percent to P3.239 billion; while revenues from silver were also lower by 23 percent to P0.063 billion.

    Padcal mine has operated for seven months as of September 30, approximately the same operating days for the entire 2012, when it voluntarily suspended operations after a sinkhole occurred at its Tailings Storage Facility (TSF) 3.

    In response to the August 2012 incident, Philex has implemented a comprehensive Integrated Environmental Management Program, which included settlement of claims, plugging of the sinkhole, cleanup of affected waterways, rehabilitation and reinforcement of the TSF, as well as construction of a new spillway.

    Nickel Asia profit
    Also in a disclosure to the PSE, Nickel Asia Corp. announced that its attributable net income (bet of minority interest) reached P1.75 billion in January to September 2013, down by 21.87 percent from P2.24 billion a year ago.

    The total volume of nickel ore sold and delivered from the company’s four operating mines increased by 8 percent to 10.32 million wet metric tons (WMT) in the first three quarters of 2013 compared with 9.56 million WMT in 2012.

    However, the lower average realized London Metal Exchange (LME) nickel price during the year resulted in total revenues falling to P8.20 billion from P9.61 billion, the company added.

    From January to September 2013, the realized LME nickel prices applicable to 3.52 million WMT of ore shipped averaged $7.11 each pound of payable nickel, as against $8.27 each pound in the same period last year. As of November 4 this year, the LME spot nickel price stood at $6.47 each pound.

    The balance of the shipments, on the other hand, were sold on the basis of a negotiated price per WMT of ore, which averaged $19.34 per WMT of ore in 2013, compared to $24.75 per WMT of ore in 2012. Most of nickel ore shipments, composed of low and medium grade variety ore, were sold to Chinese customers.

    Of the total volume of ore shipped during the first nine months of 2013, some 2.77million WMT was saprolite ore and 7.55 million WMT was limonite ore, including the initial delivery of 272,000 WMT of limonite ore to the Taganito hydrometallurgical processing plant.

    Gerard Brimo, NAC president and chief executive, said that the improved operating efficiencies resulted to a 12-percent drop in cash operating costs and expenses. From 5.11 billion in 2012, the company was able to lower the expenses to P4.51 billion in 2013.


    Please follow our commenting guidelines.

    Comments are closed.