Coral Bay Nickel plans new nickel processing plant in Palawan

Coral Bay Nickel Corp. (CBNC), a $180-million joint Filipino-Japanese nickel mining and refinery processing project in Rio Tuba, Palawan, is planning to put up a new nickel processing plant that will double the company’s nickel output to 20,000 metric tons (MT) in the next two to three years.

"We are considering expanding our operations in Palawan and we may need to build an entirely new plant next year that will allow us to double our existing output of 10,000 metric tons," said CBNC president Takanori Fujimora in an interview during the 6th Asia Pacific Mining Conference in Makati organized by the Association of Southeast Asian Nations Federation of Mining Associations (AFMA).

Fujimora said there is a need to sustain steady supply of nickel for Japan’s growing industries and the construction of the new plant is in anticipation of further increase in demand for nickel and nickel-bearing scrap in the coming years, with emerging economies such as those of India, China and the United States keeping base metal prices aloft.

"We hope to make a decision before the end of the year on how we should proceed with the construction of the plant. Currently, we are studying the costs of putting up a new one which we estimate to be higher by at least 25 percent compared to our existing plant or more than $200 million," said Fujimora.

Currently, nickel production from existing stockpiles of low-grade nickel ores within the Rio Tuba nickel mine is already at the level of 5,000 MT since its first commercial production that started in April this year. Fujimora said that by end-2006, output will reach 10,000 MT.

The project, being carried out on Palawan island, is led by Sumitomo Metal Mining Co. Ltd. (SMMC), one of the world’s biggest nickel producers and refiners, which has a 54-percent stake in the company.

Its partners include local mining firm Rio Tuba Nickel Mining Corp. (RTNMC) with a 10-percent share, Mitsui & Co., Ltd.; and Sojitz Corp. with 18-percent equity shares each. The company was capitalized at P587.5 million.

The 20-year project includes the construction of a plant adjacent to RTNMC’s Rio Tuba Mine to process low-grade oxides through HPAL (high-pressure acid leaching), and production of nickel/cobalt mixed sulfide (MS), an intermediary product of nickel refining.

HPAL is a revolutionary process, recently developed, enabling recovery of nickel from low-grade oxide ores at low cost.

The project at Rio Tuba got underway in April 2002 with the establishment of CNBC, the joint venture of the four cooperating partners.

Since then, plant construction started and core employees from the Philippines have undergone training and education at SMMC’s operation in Japan. The plant was commissioned after the mechanical completion of the processing plant in August 2004.

The Coral Bay nickel project is of major significance for SMMC in its quest to expand its overseas presence and enhance its expertise in nickel-oxide ore processing and related engineering.

As scheduled, the project includes the production of nickel and cobalt sulfide, an intermediary product of nickel refining. In the first year, 7,000 to 10,000 MT of nickel and 700 MT of cobalt will be produced.

SMMC purchases the entire volume of nickel and cobalt produced at the plant. At SMMC’s Niihama nickel refinery in Ehime Prefecture, these are used as raw material for producing electrolytic nickel and electrolytic cobalt.