Oriental Peninsula to invest $300 million in 3 projects

MANILA, Philippines - Listed mining holding firm Oriental Peninsula Resources Group Inc. (ORE) is investing a total of $300 million in three projects involving hydropower, coal and nickel off take as it diversifies its revenue streams to create a stronger platform for future growth.

On the sidelines of the company’s annual stockholders meeting Friday, ORE chairman and president Caroline Tanchay said the company will be spending the first $150 million for the first phase development of the three projects.

According to Tanchay, the ferronickel plant, which will be undertaken in partnership with a Chinese firm, will have the capacity to process 250,000 metric tons a year. “This plant will enable us to start processing which is one step closer to finished product, instead of us just exporting raw materials,” Tanchay said.

The coal-fired power plant, on the other hand, would have a capacity of 50 to 60 megawatts, Tanchay said.

Given strong demand for nickel worldwide, the company is aiming to beef up output by 100 percent as it starts operations of the Pulot mine in Palawan. 

Tanchay said the company is spending P500 million to acquire additional equipment to further beef up operations and manpower in line with its goal to double shipments next year to around 40 or 50.

Tanchay said the company, through unit Citinickel Mines & Development Corp., is aiming to do at least six shipments per month starting summer of next year. 

 “We shall invest more and expand even better to meet the growing demand for Citinickel’s high quality nickel ores in China and Australia and the rest of the world,” Tanchay said.

The Philippines ranks fifth in nickel mine production, churning out 160,000 tons of contained nickel. Total global production is around 1.5 million tons per year.

Citinickel is the holder of the 25-year Mineral Production Sharing Agreement issued by the Department of Environment and Natural Resources, covering 2,176 hectares Of the total area, 1,408 hectares are located in Espanola town while 768 hectares are in the Municipality of Narra both in southern Palawan.

Tanchay noted that only 13 percent of the estimated resources are explored. 

Since March this year, the company has had 13 shipments of nickel and expects to end the year with a total of 20 to 25.

A foreign brokerage house said ORE’s operations at full utilization could it make it one of the top mining companies in the country.

For this year, ORE is eyeing a net income of $15 million and this figure is expected to double next year as it expands its output by two-fold.

In the first half this year, ORE posted a net profit of P280 million on revenues of P506 million. Equity rose to P1.96 billion from P1.66 billion.

This would be ORE’s first year to report a profit since its incorporation in April 2007 as its production just started in the last quarter of 2010, and its maiden shipment effected only March this year.