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Lower Ore Prices Weigh on Nickel Asia

  • Friday, October 11, 2013
  • Source:

  • Keywords:Ore Nickel Asia
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Nickel Asia’s four operating mines sold 10.32 million wet metric tons (WMT) of nickel ore in the nine months to September, climbing by 8% from 9.56 million WMT in the same period in 2012, it said in a disclosure yesterday.

However, the value of the shipments totaled just P7.67 billion during the period, down 17.7% from P9.32 billion last year.

“While we have been hit by weak commodity prices for the most part of the year, we are still fortunate that demand for our various ore products remain high…” Gerard H. Brimo, Nickel Asia’s president and chief executive officer, said in a statement.

The Rio Tuba mine in southern Palawan shipped and delivered 1.34 million WMT of saprolite ore and 3.13 million WMT of limonite ore, of which 2.54 million WMT went to the Coral Bay high-pressure acid leach (HPAL) plant. The mine accounted for 43% of Nickel Asia’s total volume in the three quarters of 2013.

The Taganito mine in Surigao del Norte shipped 1.15 million WMT of saprolite ore and 1.34 million WMT of limonite ore, with 272,000 WMT of the latter initially delivered to its newly commissioned Taganito HPAL plant.

“Increasing ore deliveries to the new plant on a monthly basis is expected until such time full commercial operation commences towards the latter part of the year,” Nickel Asia said in the statement.

The Hinatuan mine in Surigao City shipped 2.69 million WMT of limonite ore, mostly of high iron variety.

A total of 240,000 WMT of saprolite ore and 435,000 WMT of limonite ore was shipped by the Cagdianao mine in Dinagat Island.

DROP IN PRICES
The estimated realized price of nickel averaged $7.11 per pound as of September from $8.27 per pound during the same period in 2012, applicable to 3.52 million WMT of ore shipped.

The balance was sold on the basis of negotiated prices per WMT of ore, which averaged $19.34 per WMT as of the third quarter from $24.75 per WMT last year.

Nickel Asia’s output will be supplemented by its new Taganito plant, with commercial operations set to start soon, Mr. Brimo said.

“At full capacity, the plant will require over 4.5 million WMT of limonite ore per year which will be supplied by our Taganito mine,” he explained.

“We can therefore look forward to further growth of our ore sales next year.”

Nickel Asia shares closed at P14.90 apiece yesterday from P15.06 on Wednesday.
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