RP may not hit mining investment goals

The country’s mining investment targets for 2010 and onwards may have to be revised as a number of mining firms have put on hold their various projects.

The most recent to announce a delay is Intex Resources Philippines Inc. whose Norwegian parent firm Intex Resources ASA last week informed the Oslo Stock Exchange that it is pushing back the timetable for the development of its $2.05-billion Mindoro nickel project.

OceanaGold, another foreign-controlled mining firm, also recently announced the suspension of its Didipio copper-gold project as it looks for a potential buyer/investor.

Intex Resources ASA president and chief executive Erlend Grimstad said the company has rescheduled the completion of the definitive feasibility study (DFS) for the Mindoro nickel project to the fourth quarter of 2009.

The decision, Grimstad explained, acknowledges that it can “optimize the process and cost efficiency of the DFS, in reference to the current global financial situation.”

Grimstad said the new schedule “should allow lower DFS capital costs to be estimated, as it will better capture the general price deflation of capital items currently ongoing in the industry.”

The delay “would also enable a larger mineral reserve to be included in the DFS parameters, as results from ongoing drilling at Buraboy can be included in the mining model,” he added.

“Intex Resources remains well funded to take the Mindoro nickel project through a full DFS study,” Grimstad pointed out.

Intex had earlier completed a pre-feasibility study  (PFS) which showed very encouraging results for the project.

According to the PFS, the Mindoro nickel mine has a number of factors can make it among the lowest capital-cost facilities in the industry. 

These factors include its location in the Philippines, a low-cost setting compared to other similar projects, and the favorable processing properties of its laterite ore.

The PFS was prepared by Aker Kvaerner of Australia, a leading global provider of engineering services and integrated solutions for the mining and petroleum industries. 

Aker Kvaerner has a solid reputation in the field of engineering relating to nickel-laterite projects.

The PFS noted that operating costs are estimated at $3.60 per pound nickel before cobalt credits at the design capacity.

These costs are expected to decrease to $3 per pound nickel before cobalt credits when Stage 2 of the project is implemented.

Total capital costs are projected to be around $2.05 billion, higher than previously indicated due a number of factors such as contingency for higher nickel production, a weaker dollar and dramatically increased costs of energy and equipment.

Intex Resources was aiming  for the completion of its DFS within 12 months. 

Intex Resources had hoped to be able to proceed with its ambitious nickel project in Mindoro by next year despite the current low prices of nickel in the world market.

At the 8th Asia Pacific Mining Conference and Exhibit in October this year,  Grimstad had said that development of its Mindoro nickel project is estimated at $2 billion for Stage 1 and an additional $900 million for Stage 2.

Grimstad said all of Intex’s Philippine production would be sold to refineries.

He had added that the Mindoro nickel project could be a “really huge production with extremely low costs and can be competitive to other projects around the world.”