SMM3, 20 March: Nickel Asia Corp, the largest nickel mine producer in the Philippines, said it expects shipments in 2019 to be the same as last year, but plans to increase domestic sales to maximize profits.
But Emmanuel Samson, senior vice president and chief financial officer of, Nickel Asia, said Indonesian miners began challenging Philippine miners after the ban on metal exports to China was lifted in 2017. Indonesia's largest nickel producer has been increasing exports to China, while Chinese buyers prefer Indonesian ore because of higher grade.
To make up for its loss of market share in China, Nickel Asia will increase shipments to its two Philippine smelters. These factories used to buy ore linked to LME prices and ship them to Japan for further processing into "grade I" nickel.
He said nickel ore sales this year would be roughly the same as 19.3 million wet tons in 2018 and up from 17.7 million wet tons in 2017.
The company operates four of the 30 nickel mines in the Philippines. The company's net profit rose 9 per cent last year to 3.01 billion Philippine pesos ($57.1 million), up from 2.77 billion Philippine pesos last year, thanks in large part to higher LME prices.
In 2018, LME sold nickel to the two domestic processing plants at an average price of $5.95 a pound, compared with an average price of $4.67 in 2017.
On the other hand, unprocessed pulp shipped to China last year accounted for 60 per cent of the company's total sales, at 11.54 million wet tons, up from 9.64 million tons in 2017, although the average price fell to $21.53 from $24.42 the year before.
Samson said that in order to benefit from the rise in LME prices, Nickel Asia could increase its LME-related domestic business to 45-50 per cent, while exports to China would be reduced to 50-55 per cent.
Nickel Asia is the only nickel miner in the Philippines that owns a processing plant, making it "unique" compared with other Filipino miners. Nickel Asia's fifth mine, the Dinapigue project, was acquired in 2015 and is still under exploration and development. The company hopes to start shipping next year or by 2021, but did not disclose estimated production.
Global metal producers expect demand for nickel for electric vehicle batteries to grow sharply in the coming years.
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