Nickel Asia shipments up but lower in value

MANILA, Philippines - Listed miner Nickel Asia reported yesterday a 12.5 percent year-on-year increase in its nickel shipments in 2012, but the value of shipments fell 7.4 percent mainly because of lower realized nickel price based on the London Metal Exchange (LME).

In a disclosure to the local bourse, the company reported that the the total volume of nickel ore shipped from its four operating mines in 2012 reached 11.7 million wet metric tons (WMT) in 2012, an increase of 12. 5 percent from 10.4 WMT sold in 2011.

“This is the highest volume of ore shipments achieved by the group in its history,” the company said.

Nickel Asia’s Rio Tuba mine produced 48 percent of the total volume shipped during 2012. Shipped from the mine were 2.3 WMT of saprolite ore and 3.4 million WMT of limonite ore.

The company’s Taganito mine, where a new high-pressure acid leach (HPAL) process is being contructed, shipped a total of 1.7 million WMT of saprolite ore and 710,000 WMT of limonite ore. Combined, this accounted for 20 percent of the shipment volume.

The Hinatuan mine shipped a total of 2.6 million WMT of limonite ore, while the Cagdianao mine shipped a total of 290,000 WMT of saprolite ore and 795,000 of limonite ore. These two mines accounted for 23 percent and nine percent of the company’s 2012 shipments respectively.

Despite an increase in the volume of shipments, the estimated value of shipments fell 7.4 percent year-on-year to P11.2 billion in 2012 from P12.1 billion  in 2011 mainly due to lower realized nickel price based on the LME.

The company noted that the realized LME nickel price applicable to 4.7 million WMT of ore shipped in 2012 was at an average of $8.10 per pound of payable nickel, down from $10.53 per pound of payable nickel in 2011.

The company said that the balance of shipments in 2012, which are mainly the low and medium grade variety ore sold to Chinese customers, were sold on the basis of a negotiated price per WMT of ore which averaged $24.41 per WMT of ore compared to $24.47 per WMT of ore in 2011.

Nickel Asia said it has executed contracts with various customers for the shipment of 11. 7 million WMT of saprolite and limonite ore. This includes. 3.2 WMT of limonite ore to be delivered to the Coral Bay processing plant and another 1.8 million WMT of limonite  ore to be delivered to the new Taganito HPAL nickel processing plant which is expected to begin operations during the first half of 2013.

The company expects that in 2014, when the Taganito HPAL processing plant will have been operational for a full year, total ore deliveries from the mine to the plant would reach 4.5 million WMT.