Global Ferronickel Holdings Inc. | PHOTO: Facebook page of Global Ferronickel Holdings Inc. (FNI)
Listed mining firm Global Ferronickel Holdings Inc. has shelved its $50 million (approximately P2.9 billion) steel plant in Bataan province due to unfavorable market conditions.
Global Ferronickel said its unit, FNI Steel Corp., decided to no longer pursue the FNI Rebar Steel Project located in Mariveles town and instead, it will focus on its current businesses that provide long-term value to the company.
The firm arrived at this decision due to the gloomy outlook following the comprehensive review of market conditions, capital requirements, and the outlook for the rebar steel industry.
READ: Global Ferronickel net income dives by 60.7% from Jan-Sept 2024
Rebar, short for reinforcing bar or reinforcement bar, is a metal bar used in construction to reinforce concrete structures.
“The company believes it is in its best interest to focus on opportunities from its current businesses that offer greater long-term value—nickel ore mining and export, port operations and logistics, and ferronickel smelting—which continue to see strong demand driven by the global transition to clean energy and electric vehicles,” Global Ferronickel said in a disclosure on Friday.
Global Ferronickel, which holds interests in nickel ore mining, logistics, cement and steel production, and port operations, will explore options to utilize its land in Bataan, whose value has appreciated over time.
“While the steel project will not proceed, it has generated value for the company through the acquisition of land in Bataan that has appreciated in value. These assets will be strategically evaluated for profitable use,” it said.
It will also initiate the de-registration process with the Authority of the Freeport Area of Bataan (AFAB). Enterprises located in export processing zones are allowed to import capital requirements and raw materials without paying duties and taxes, along with other import restrictions.
The mining company initially planned to begin the construction of the rebar steel rolling plant in the first quarter of 2021, which would have the capacity to produce 600,000 metric tons of carbon steel rebars annually.
However, the coronavirus pandemic, specifically the travel restrictions, stalled the project’s development as some of the firm’s technical experts were based abroad at that time.
As part of its diversification plans, Global Ferronickel acquired a 40-percent stake in Freeport Area of Bataan (FAB) port operator Seasia Nectar Port Services Inc. (now known as Mariveles Harbor Corp.) to support the plant’s operations. It partnered with Hong Kong-based Huarong Asia Limited to incorporate FNI Steel Corp. and FNI Steel Landholdings Corp. for the project, but Huarong Asia relinquished its stake in both entities.