MANILA, Philippines - Environment and Natural Resources Secretary Ramon Paje has ordered the Mines and Geosciences Bureau (MGB) to conduct an assessment of local iron deposits as possible raw material feeds for a proposed integrated iron and steel facility in the country.
“We have to assess if we have sufficient iron ore reserves here in the country for the production of pig iron, which will serve as feeds in case we put up our own integrated iron and steel facility. Being self-sufficient in iron ore raw materials will enable the government to save millions of dollars it is now spending in the importation of semi-finished steel raw materials for the government’s steel industry,” Paje said
He said the move to establish an integrated iron and steel facility will protect the country’s economy from being drained of its dollar reserves resulting from the importation of semi-finished steel as raw materials for the country’s steel industry.
Global Steel, which took over the facilities of National Steel Corp. in Iligan City, continues to import iron rods for its production of hot and cold-rolled coils.
The Indian-owned firm has not been able to do a backward integration of its steel manufacturing operations in spite of initial promises to invest in iron mining operations. Instead, it continues to seek tariff protection for its HRC and CRC products.
An MGB study showed that the current consumption of the country’s steel industry is approximately four million tons per year, and is expected to increase to eight million to 10 million annually. The current price of imported iron ore is $70 per ton.
The study further showed that steel imports today, mostly in the form of semi-finished steels, represent the second highest importations, next only to oil and petroleum products.
Paje said the MGB is tasked not only to evaluate the quantity of local iron ore reserve but also to determine if the grade of the iron deposits is sufficient for the production of steel in an integrated iron and steel facility.
The MGB metallurgical study further revealed that iron ores must have a grade of at least 60-percent iron in order to be eligible as raw material for the production of steel.
MGB director Leo Jasareno said the country’s iron reserve is placed at 493.5 million tons as of end-2009, with Region V (Bicol) dominating the field on 318.6 million tons of iron reserves.