DENR okays MPP of Platinum Group

Environment and Natural Resources Secretary Jose L. Atienza has approved the mineral processing permit (MPP) of the Platinum Group Metals Corp. (PGMC) for its proposed ferronickel processing plant located in Manticao, Misamis Oriental.

PGMC’s MPP application was filed way back in June 2006.

With the approval of the MPP, PGMC’s Manticao ferro-nickel processing plant will finally be able to start operations.

The Manticao plant will be processing nickel ores through calcination and smelting.

The processing plant will have an average annual operating cost of $36.536 million and is designed to produce 36.7 tons per day of ferronickel (containing about 20-percent nickel).

PGMC’s integrated processing and mining operations this year is expected to result in an income of $5 million, up from the $4-million income it posted in 2007.

The slight growth would come from the projected export sale of 1.3 million pounds of contained nickel and 800,000 metric tons of nickel ore this year.

PGMC’s $4-million income last year came solely from its nickel ore exports.

PGMC’s income this year is expected to be affected by the more than 50-percent drop in nickel price from last year’s $24 per pound to the current $9.50 per pound.

PGMC is just starting up the operations of its two ferronickel processing plants in Iligan, Davao and Manticao, Misamis Oriental.

PGMC expects its income to “at least double” to $10 billion in 2009 once the two ferronickel processing plants are fully operational.

PGMC also hopes to increase its export of contained nickel to seven million pounds by next year.

PGMC had earlier announced that its mine sites in Surigao and Isabela will ship at least 450,000 metric tons of nickel ore to Australia before the end of the third quarter of this year.

Atayde said that the 450,000 MT is booked, but depending on the weather, PGMC’s nickel ore exports for the whole of 2008 could reach as much as 800,000 MT.

PGMC chairman Ramon R. Atayde had previously urged the DENR to encourage more investments in value added mineral processing, especially in the nickel sector.

A sentiment echoed just last Friday by Berong Nickel Corp. chief executive officer George J. Bujtor at the sidelines of Atlas Consolidated Mining Corp.’s annual stockholders’ meeting at the Valle Verde Country Club in Pasig City.

Both Atayde and Bujtor cited the downturn in the nickel industry and the shift away from raw laterite ore to more value-added nickel.

 According to Atayde, several small local nickel mining firms have stopped operations due to the drop in global prices for nickel ore.

Nickel ore prices, Atayde said, have dropped to $9.50 a pound this year from last year’s high of $24/lb.

This is partly due, Atayde explained, to the loss of the Chinese market which had previously been a major buyer of low-grade nickel ore.

Bujtor confirmed Atayde’s observation that the nickel industry must move to more value-added processing instead of just relying on the export of unprocessed laterite ore.

He pointed out that China, which is the major buyer of laterite ore, is adopting new furnaces that requires moving away from low grade ore.

The disappearance of the Chinese market, Bujtor said has already hurt a lot of small Philippine nickel mining companies.