Listed nickel producer Global Ferronickel Holdings Inc (FNI) and China’s Baiyin Nonferrous Group Co Ltd are partnering to set up a stainless steel plant in the Philippines estimated to cost up to $700 million.
FNI chairman Joseph Sy and Baiyin chairman Liao Ming signed a Memorandum of Cooperation (MoC) during President Rodrigo Duterte’s state visit to China to boost trade and economic collaboration between the two nations.
FNI is the second largest nickel producer in the Philippines and the largest single lateritic mine exporter in the world. Baiyin is a major state-owned enterprise formed in the Gansu province and is one of the largest producers of non-ferrous metals in China.
FNI and Baiyin announced they will evaluate investments in value-added downstream projects in the Philippines, including the feasibility of constructing an integrated 200-series stainless steel plant in the Philippines with an annual capacity of one million tonne using lower grade nickel ore sourced in the Philippines, an estimated total investment of around $500 million to $700 million.
Sy said, the company recognises the importance of promoting close cooperation with China to spur economic growth in the country.
“We see Baiyin as a strong partner who will play a vital role with us in creating greater value added in the nickel value chain in the Philippines,” Sy said.
Baiyin has a total asset value of over $7 billion (RMB45 billion) and has produced over 5.5 million tonnes of base metals over the past 60 years. The key stakeholders of Baiyin are the State-Owned Assets Supervision and Administration Commission of the Gansu Province and CITIC Guoan Group.
Baiyin Group is focusing on building a Tier 1 international resources company and has successfully developed mining investments in South Africa, Peru and the Democratic Republic of the Congo.
The MoC is intended to promote closer industrial cooperation as both companies recognise the economic benefits arising from the availability of low-cost nickel ore in the Philippines.
FNI is one of the lowest cost producers of nickel ore in the Philippines. FNI is a key supplier to major customers in China. Nickel ore is a key ingredient in China’s production of stainless steel, coins, rechargeable batteries and special alloys. China is the largest consumer of nickel in the world, accounting for around 50 per cent of world consumption.
FNI’s last trading price increased 8.70 per cent or P0.100 to close at P1.25.