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Nickel Asia mineral shipments surged by 117% in H1

Nickel Asia Corp. more than doubled its mineral ore sales in the first six months of the year on higher deliveries to its new downstream plants.

In a disclosure to the Philippine Stock Exchange, Nickel Asia said its four operating mines sold an aggregate 7.73 million wet metric tons (WMT) of nickel ore in the first half of 2014—40 percent more than the 5.54 million wet metric tons (WMT) reported in the same period last year.

The estimated value of shipments for the six months to June amounted to P8.9 billion—117 percent higher than the P4.1 billion reported last year.

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The surge in shipment volumes in the first half of 2014 was largely the result of increased ore deliveries to the HPAL plants, in particular to the Taganito facility, now on its first full year of commercial operations.

Total ore deliveries to the two HPAL plants reached 3.62 million WMT in 2014 compared to 1.64 million WMT in 2013. The direct export of ore likewise contributed to the growth in the company’s shipments in the first half of the year—from 3.90 million WMT to 4.11 million WMT.

On a per mine basis, the company’s Taganito operations was the largest, accounting for 42 percent of total shipments in the first half. The mine shipped a total of almost 950,000 WMT of saprolite ore and 2.34 million WMT of limonite ore, including 1.96 million WMT of limonite to the new plant.

The Rio Tuba mine accounted for 38 percent of total shipments during the first half. The mine shipped out 1.04 million WMT of saprolite ore and 1.94 million WMT of limonite ore, including 1.66 million WMT to the adjacent Coral Bay plant.

The company’s two other operating mines, Hinatuan and Cagdianao, commenced shipments only in April and May, respectively, following the end of the wet season.

The Hinatuan mine shipped a total of 1.09 million WMT of limonite ore and 51 thousand WMT of saprolite ore, while the Cagdianao mine shipped a total of 110,000 WMT of limonite ore and 212,000 WMT of saprolite ore.

“The tight supply of nickel ore brought about by the Indonesian ore export ban, has led to a surge in prices to Chinese customers, most notably during the second quarter of the year, significantly higher than the increase experienced in LME (London Metal Exchange) prices,” Nickel Asia said.

As a result, effective last April, all ore sales to Japanese customers have been benchmarked to Chinese prices on the basis of a negotiated price per WMT of ore. The average price of saprolite and limonite ore, according to Japanese and Chinese customers, totaled 4.11 million WMT during the first half, amounting to $41.18 per WMT. This was higher than the average of $21.62 per WMT reported in the same period last year, when a total of 3.90 million WMT of ore was sold.

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“We are delighted by the strong performance of our company during the first half, and in particular the increase in prices of our various ore products,” said Gerard H. Brimo, president and CEO of the company.

“We are likewise very pleased by the performance of the new Taganito plant, where we have 22.5-percent equity and which achieved approximately 80 percent capacity in the first half of this year,” he added.

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TAGS: Business, Nickel Asia Corp., ore sales
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