San Miguel eyes Nonoc nickel project

MANILA, Philippines - Food-to-infrastructure conglomerate San Miguel Corp. said yesterday it was in talks with Philnico Mining & Industrial Corp. for a possible investment in the mothballed Nonoc nickel mine located in the southern region of Mindanao.

In a disclosure to the stock exchange, San Miguel corporate information officer Ferdinand K. Constantino said negotiations are currently ongoing between the diversifying conglomerate and the controlling shareholders of Philnico to revive the operations of the Nonoc mine.

“We are evaluating the viability of investing in the Nonoc nickel mining project. An appropriate disclosure shall be made to the exchange in the event such investment is concluded,” Constantino said.

Philnico is 55 percent owned by Compline Resources Co. of Hong Kong , 30 percent by Australia’s Pacific Energy Ltd. and the balance by local investors.

Located on Nonoc Island off Surigao City, the Nonoc mine is believed to hold one of the biggest nickel and cobalt resources in Southeast Asia.  It ceased operations in 1982 due to tight liquidity problems and high energy costs. Philnico reportedly failed to pay the government $263.8 million in debt.

During the period of the plant’s operation, a total of 22.7 million tons of ore were mined and processed.

The potential of the mine as a large source of nickeliferous mineral was first recognized in the 1950’s after initial exploration that was carried out by the Philippine Bureau of Mines, during which time the area was proclaimed as a mineral reserve.

Surigao City Mayor Ernest Matugas was earlier reported to have said that he personally persuaded San Miguel president Ramon S. Ang to invest in the Nonoc mine.

It would be recalled that China’s Jinchuan Group Ltd. had expressed interest to invest as much as $1.5 billion in the rehabilitation of the Nonoc nickel mines.

San Miguel has been aggressively moving away from its core food and beverage business, and into heavy and high-growth sectors including telecommunications, oil refinery, power and infrastructure. The company earlier sold $900 million worth of equity and convertible bonds to help fund infrastructure investments.