RP unit of Aussie mining firm set to launch $817-M mining project

QNI Philippines Inc., the local unit of Australian mining company Queensland Nickel Inc., is planning to start construction this year for its $817-million Adlay-Cadianao-Tandawa (CDT) mining project in Surigao del Norte which is programmed to produce nickel and cobalt by 2007.

Mines and Geosciences Bureau (MGB) sources said QNI Phils. will start building pier facilities in May. The infrastructure, costing $19.2 million, will be built by its partners, Case Mining and Development Corp. and CTP Construction and Mining Corp.

The Adlay mine is estimated to contain reserves of 5.82 million metric tons (MT) at 1.61 percent nickel and 0.09 percent cobalt while the Caga mine is estimated to have 12.74 million MT of mineral resources at 1.58-percent nickel and 0.11 percent cobalt.

Gross value of the reserve is placed at $817.732 million. For the next 13 years of operations, it is projected to post revenues of $157 million or $12 million yearly, while taxes to local government is seen at $15.7 million or an average of $1.2 million yearly. For the National Government, tax revenues are estimated at $4.7 million or $362,000 yearly.

QNI, an affiliate of Queensland Nickel, is part of BHP Billiton’s Stainless Steel Materials Group, and the ore from the Philippines will be processed in Queensland. The company has a mineral refinery in Vabulu near Townsville, Queensland which has an annual production of 30,000 MT of nickel and 2,000 MT of cobalt.

BHP Billiton is among the world’s top five producers of nickel and cobalt, supplying six percent of global nickel consumption and seven percent of the world’s cobalt need.

BHP Billiton is also a leading producer of lead and zinc and provides base metal concentrates to custom smelters and copper cathodes to rod and brass mills and casting plants.

Aside from the CDT, BHP-Billiton and Queensland Nickel Inc. are investing $1 billion to develop the Pajuda nickel project mining area covering 11,799 hectares in Mati, Davao Oriental. It is under exploration and is set to start commercial operations in 2009.