Nickel Asia to boost production at Cagdianao mine next year
Nickel Asia Corp. (NAC) is increasing production at its Cagdianao mine site by 10% next year, as it anticipates an improvement in nickel prices as Indonesia begins implementing a nickel export ban.
“For 2020, the budget (production) for Cagdianao is 3 million wet metric tons (WMT). We’ll add about 300,000 (WMT) next year,” NAC Vice-President for Operations Aloysius C. Diaz told BusinessWorld in an interview last month.
Next year’s production would be higher than the 2.354 million WMT target for this year.
The Cagdianao mine site is located in Barangay Valencia in the municipality of Cagdianao, Dinagat Islands in the Caraga Region. It has a total Mineral Production Sharing Agreement (MPSA) for 697 hectares, a third of which is mineable.
The mine can produce up to 5 million WMT of nickel, which is used for the production of stainless steel.
“The improved prices due to the ban to be imposed on Indonesian nickel ore export by the Indonesian government, and of course we have to increase productivity of our CMC (Cagdiano Mining Corp.) team,” Mr. Diaz said.
Indonesia has announced that it will start its nickel ore export ban on Jan. 1, 2020.
Meanwhile, Mr. Diaz said this year, the company expects to have additional seven shipments, which have an average of 53,500 WMT per vessel, or a total of 374,500 WMT, bringing expected production this year at 2.728 WMT.
“The Cagdianao mine will be ahead by seven shipments this year, compared to 44 shipments scheduled for this year. Cagdianao will make about 51 shipments this year,” he said.
The bulk of the shipments with 1.55% ore grade, or medium-grade ore, are being exported to China, while those with 1.7% ore grade are sent to Japan.
“We have to improve our bottomline because the opportunity presented itself. We had improved productivity and the price of our product also improved,” Mr. Diaz noted.
For the first six months of 2019, NAC reported a 48% decrease in its attributable net income due to foreign exchange losses. The listed miner said earnings dropped to P713.75 million during the six-month period from P1.39 billion it booked in the same period last year.
Revenues went up 1.14% to P7.46 billion during the January to June period.
It incurred P81-million net loss from its equity investments in Coral Bay Nickel Corp. and Taganito HPAL Nickel Corp. (THPAL) versus net earnings of P526 million last year due to lower nickel and cobalt prices.
The miner sold 9.08 million WMT of nickel ore during the January to June period, 2% up from last year’s 8.89 million WMT. Limonite ore deliveries also increased 10% to 4.41 million WMT, which offset the decline in ore export volumes by 4% to 4.67 million WMT.