DENR to study viability of putting up integrated iron and steel plant in RP

MANILA, Philippines - The Department of Environment and Natural Resources (DENR), through the Mines and Geosciences Bureau (MGB), will assess the viability of establishing an integrated iron and steel facility in the country.

DENR Secretary Horacio Ramos said the move is prompted by the unstable and increasing prices of iron and steel in the world market which might impact the local economy in terms of possible higher prices of vehicles and consumer products. 

“The country is endowed with iron resources that can supply the iron ores and concentrates for the planned integrated iron and steel facility. With that, the possibility of making the iron and steel industry as a major backbone of the country’s industrialization program is extremely favorable,” Ramos said.

In his report to President Arroyo, Ramos recommended the creation or revival of a work and study group for the integration of the Philippine iron/steel industry utilizing indigenous iron ores.

The group is tasked to fully assess the iron ore potential of the country (e.g. the iron ore deposits in Sta. Ines, Antipolo, Rizal; Abra de Ilog in Occidental Mindoro; Midsalip in Zamboanga del Norte). Most of the known Philippine iron ore deposits, terrestrial or offshore, are magnetite deposits that are suitable for a direct reduction furnace.

 “They will also study the viability of setting up an iron processing/steel plant. The estimated minimum feed requirement for such a plant is around 2.4 million tons per year, and the estimated capital expenditure for such plant is around $1.6 billion,” Ramos noted.

Apart from this, the group will study the package of incentives that can be given to mining companies producing iron ore and to companies willing to put up iron ore/steel plants.

 “They will check the option of imposing government control on the exports of iron ore within the next five years, taking into consideration the need to conserve the resource for the possible establishment of iron ore/steel processing plants as well as the rights and privileges of companies exploring and/or producing iron. This should also include a study on possibly imposing controls on the price of substitute materials (e.g. cement) which price might increase,” Ramos said.

The DENR chief said he has already directed the MGB to come up with an updated resource inventory for iron and other iron-bearing deposits in the country.

He said the proposed iron and steel facility is a brainchild of the Board of Investments of the Department of Trade and Industry, the Metals Industry and Research Development Center of the Department of Science and Technology, and the MGB. It is estimated to cost P20 million and could be undertaken in two years.

Ramos said in past two weeks, the price of iron ore in the world market has shot up to $120 to $130 per metric ton from the $70 per metric ton price in 2009.