MANILA, Philippines — China's Jiangxi Rare Earth and Rare Metals Tungsten Group Corp. will build a pilot nickel-cobalt ore processing plant in the Philippines, its Philippine partner Atlas Consolidated Mining and Development Corp. said Friday.

It will be built at the Berong Nickel Corp's mine on the western island of Palawan, and is expected to have a capacity of 3,000 to 5,000 tons a year, which will be sold to the Chinese firm at global market prices, it added.

Atlas, which has a 25.2-percent stake in Berong Nickel Corp., said the plant would provide key inputs to the eventual construction of a full-scale plant capable of processing up to 40,000 tons of ore a year.

The Jiangxi group, owned by China's Jiangxi province and the world's largest tungsten and rare metals processing company, is now building a refinery in China to process the product from the Berong leach plant.

Berong Nickel Corp. will have an option to acquire up to a 25-percent stake in the refinery, it added.

Jiangxi group's investment is in line with China's continuing heavy investment in oil and mineral resources abroad to supply the growing needs of its powerhouse manufacturing sector.

Atlas told the Philippine Stock Exchange in a disclosure statement that the Chinese firm will finance the entire capital cost of the leach plant in exchange for a guaranteed long term laterite ore supply agreement.

The partners' ownership shares in the plant are yet to be agreed, it added.

Atlas said the Berong deposit had about 140 million tons of reserves averaging 1.41 percent nickel and 0.07 percent cobalt. It started production last year.

The deal "puts Berong Nickel Corp. on the path to becoming a mid-tier, vertically integrated nickel producer," it said.

"In the current economic climate, added value processing of ore is the optimum way forward for nickel producers, eventually to replace direct ore shipping," it added.