Sumitomo Mining starts feasibility study for cobalt, nickel projects

Japanese mining firm Sumitomo Metal Mining Co. Ltd. said they have started their feasibility study which will determine if they will invest more than $1 billion for cobalt and nickel smelter projects in Mindanao.

"We are encouraged by the prospect of Sumitomo to expand its venture in the country.  Mining firms are very welcome to do business in the country as long as they comply with our various laws such our environmental requirements," Trade and Industry Secretary Peter B. Favila said.

 The new venture of Sumitomo is in recognition of the efforts of the government to promote investments, specifically in the mining sector, Favila added.

The Mindanao plant forms part of the plan of Sumitomo to eventually produce 100,000 tons of nickel annually. 

Sumitomo said it would set up a joint venture with Taganito Mining Corp., a firm owned by the Zamora group. The proposed location of the project is in the same area where Taganito in Northeastern Mindanao is located. 

The project involves constructing a new refinery using high-pressure acid leaching method, a technique used to recover nickels and cobalt from limonite, or low-grade nickel iron monoxide, at a site near the Taganito mines in Mindanao.

The plant is envisioned to produce nickel/cobalt mixed sulfide at a rate of 30,000 tons a year

Should the venture push through, it will be initiated next year and will start producing cobalt and nickel by 2012. The mining activity is projected to continue for the next 30 years. 

Presently, Sumitomo said they are in the process of completing the expansion of its Coral Bay nickel mining and processing project in Palawan. The expansion project, worth $300 million is expected to double the project’s 10,000 capacity by 2009.

Favila, who is also the chairman of the Board of Investment (BOI), said mining ventures are big ticket projects which are eligible for incentives under the Investment Priorities Plan (IPP). 

The secretary said the government is encouraging mining ventures because it helps develop the countryside by employing a lot of labor, constructing roads, and developing communities that are near the mining site.