Nickel Asia doubles profit in H1

MANILA, Philippines - Nickel Asia Corp., the country’s biggest nickel miner, posted a net income of P1.73 billion in the first half of this year, more than double what it reported in the same period in 2010.

In a disclosure to the Philippine Stock Exchange, Nickel Asia attributed the robust performance to higher sales of nickel ore, which allowed it to grow revenues by 68 percent to P5.33 billion.

Total volume of nickel ore sold and delivered from the company’s four operating mines reached 4.22 million wet metric tons (WMT) as against 3.39 million WMT in 2010.

Of the total volume of ore shipped, 1.82 million WMT was saprolite ore and 2.4 million WMT was limonite ore, of which 1.31 million WMT was shipped to the Coral Bay hydrometallurgial processing plant.    The average realized exchange rate during the period under review was P43.52 to the dollar.

The realized LME nickel price applicable to 1.96 million WMT of ore shipped averaged $11.42 per pound of payable nickel compared to $9.18 per pound of payable nickel in the same period last year.

As of July 28, 2011, the London Metal Exchange spot nickel price stood at $11.05 per pound. The balance of the shipments sold was on the basis of a negotiated price per MWT of ore which averaged $20.71 per WMT of ore compared to $15.60 per WMT of ore.

Due to the increase in shipment volumes, total cash operating costs and expenses rose 19 percent to P2.16 billion from P1.81 billion.

The company’s strong showing was likewise boosted by a dividend income of P263.8 million from its six percent indirect affiliate Coral Bay Nickel Corp.

 “We are certainly reaping the benefits from our investment in downstream processing. The CNBC plant has been a great success and should meet its new annual capacity of 24,000 tons of contained nickel this year,” said Gerard H. Brimo, president and chief executive officer of Nickel Asia.

 “All indications point to the compay achieving record shipment volumes for 2011 as demand for our nickel ore remains very strong,” Brimo said.

Nickel Asia also disclosed that the construction of the country’s second hydrometallurgical nickel processing plant remains on schedule with plant commissioning expected mid-2013. The company has a direct 22.5 percent equity interest in the plant which is being constructed adjacent to the company’s Taganito mining operations in Surigao del Norte.

All debt financing arrangements for the new plant have been concluded and the initial drawdown of the loan component from the Japan Bank for International Cooperation will be made in early August.