Global Ferronickel sees new steel venture operational by 2021
GLOBAL Ferronickel Holdings Inc., the Philippines’ second-largest nickel ore producer, said on Wednesday it expects to bring its planned rebar processing plant up and running by 2021, as the company seeks to boost profitability amid growing domestic demand for steel products.
The project, a joint venture with Hong Kong-based Huarong Asia Ltd., will require an initial investment of $20 million, plus $10 million for capital expenditures, Global Ferronickel President Dante Bravo said in a media briefing.
The joint venture will process billets imported from China into rebars, and will also bring in Chinese equipment to operate the plant with an annual capacity of 600,000 tons, he said.
Steel demand in the Philippines, one of world’s fastest-growing economies, is forecast to rise as much as 6% this year to a record 11.1 million tons, driven mainly by the government’s massive infrastructure spending, according to industry group Philippine Iron and Steel Institute.
The project will be financed using internal cash and loans, Mr. Bravo said.
Global Ferronickel, which sells all its nickel ore to China, has lowered its shipment target this year to about 5 million wet metric tons (WMT), from an initial goal of 5.7 million WMT, citing dwindling output from its main Caga-2 mine.
The miner has opened its Caga-3 mining area this year, which will enable it to ship an average 5 million WMT of ore annually in the next few years, Mr. Bravo said.
The Philippines is China’s second-biggest supplier nickel ore, but its annual shipment is just a fraction of what comes from No. 1 producer Indonesia.