Marcventures inks 3-yr nickel deal

MANILA, Philippines - Marcventures Mining & Development Corp.(MMDC), a subsidiary of publicly-listed Marcventures Holdings Inc., has inked a three-year contract with Dunfeng International (Philippines) Inc. for the supply of nickel laterite ore.

Under the agreement, MMDC will supply three million wet metric tons of nickel laterite ore to Dunfeng.

Marcventures assistant corporate secretary Ana Maria A. Katigbak said Dunfeng is one of the largest buyers of Philippine nickel ore for export to China and has several major Philippine nickel mining companies as its suppliers.

 “This is in line with the strategy of MMDC to combine a fixed sales contract with spot sales for its nickel ore production,” Katigbak said.

According to a research report by Abacus Securities, Marcventures is seen to post net earnings of almost P1 billion in 2012 or about 150 percent more than its projected net profit of P383 million this year as it enters its first full year of production.

The company is aiming to produce 600,000 metric tons of nickel ore in its  first year of operations and plans to increase it to 800,000 MT and 1.2 million MT in the second and third years, respectively.

It earlier tapped Japan’s Hanwa Co. Ltd. for the exclusive distribution of its nickel ore to countries such as Japan, South Korea, China, India, United States and in Europe.

Nickel is commonly used in producing stainless steel, super alloys, electroplating, batteries, coinage, magnets and other industrial and commercial materials.

Based on the Abacus report, Marcventures shipped approximately 110,000 WMT of high-grade nickel ore worth around P300 million in the third quarter this year.

Aside from this, the company has pre-sold the rest of its 2011 high-grade nickel ore production for shipment in the last quarter of 2011.

In 2012, with a full year of operations, Marcventures projects at least 700,000 WMT of high-grade nickel ore sales, which could fetch a net income of P968 million based on a conservative estimate of $55 per WMT.