Nickel Asia hikes capex as demand increases
MANILA -Listed Nickel Asia Corp. (NAC) is expanding its operations as it earmarked up to P4.5 billion in 2023 for mining projects in the pipeline, a senior executive said.
In a briefing, NAC vice president Andre Mikael Dy said the capital expenditures (capex) for the mining business this year is larger than last year’s P2.5 billion.
In February, NAC announced Hallmark Mining Corp. and Austral-Asia Link Mining Corp. accepted its letter of intent for the firm or its wholly-owned subsidiary to be the sole and exclusive mining service contractor for the two companies.
This was subject to the conduct of due diligence and exploration activities and the execution of definitive agreements among the parties.
“The letter of intent also permits the conduct of a feasibility study to determine the economic and technical viability for Nickel Asia to establish a high pressure acid leach (HPAL) or equivalent mineral processing plant within the [mining] area,” it added.
An HPAL extracts nickel and cobalt from laterite ore bodies.
Hallmark has a mineral production sharing agreement (MPSA) covering 4,999.71 hectares located in Mati and San Isidro, Davao Oriental. Austral-Asia’s MPSA spans 5,000 hectares in Mati and Governor Generoso, also in Davao Oriental.
NAC is confident of surpassing its nickel ore production in the previous year amid the possible impact of the El Niño weather phenomenon.
“We are optimistic that we can hit a production target of more than last year’s 15.9 million wet metric tons (WMT),” said Dy without providing a particular target.
NAC also provided an upbeat outlook on nickel shipments.
“The nickel imports were lower versus 2021 because of the weather in the Philippines so there’s no need to shift to other markets. As the weather improves, we expect imports to return to pre-2022 levels,” he added.
Although the weather is anticipated to be drier this year, the mining company is implementing certain measures to hedge the risks through its operations.
“For example, one of the things we’re doing is increasing our stockpile volume. Even if there is heavy rainfall in the times when it’s not raining, we can [source] ore from our stockpiles,” Dy explained.
Nickel Asia saw its 2022 net income rise by 1.5 percent to P7.93 billion, basking in on higher metal prices and favorable foreign exchange rates despite lower sales volume.
Revenues climbed by 2 percent to P28.03 billion while nickel ore sales volume decreased by 11 percent to 15.94 million WMT.