Nickel Asia ore shipments drop 40%

MANILA, Philippines - Nickel Asia Corp. recorded an almost 40 percent drop in the value of its nickel ore shipments for 2015 despite a 10 percent increase in volume.

In a report to the local bourse, Nickel Asia said the estimated value of shipments from January to December 2015 reached P14.4 billion, down 39.2 percent from P23.7 billion the previous year.

Nickel Asia’s four operating mines sold a total 19.7 million wet metric tons (WMT) of nickel by year-end 2015, higher than the 17.9 million WMT shipped and delivered the previous year.

Direct exports of ore contributed to the increase in the company’s shipment volume, rising to 11.88 million WMT from 10.47 million WMT in 2014.

Ore deliveries to the company’s ore leaching plants also rose in 2015, particularly the Taganito plant which completed operations at full capacity. The Taganito mine accounted for 39 percent of total shipments during the period.

Prices of nickel ore exports in 2015 averaged at $22.66 per WMT, significantly lower than the average $45.10 per WMT in 2014.

There was a surge in ore prices in 2014 on speculations of supply tightness as the Indonesian ore export ban took effect. The supply tightness, however, did not materialize because of an increase in supply from other sources and weaker global demand.

Low-grade limonite ore shipped to the Coral Bay and Taganito processing plants, which remains linked to prices at the London Metal Exchange, fetched an average price of $5.36 per pound of payable nickel in 2015 compared to $7.69 per pound sold in the prior year.

“The slowdown in China’s economic growth coupled with a strong US dollar clobbered metal prices across the board, and in the case of nickel, resulted in a steep reversal of the strong prices we experienced in 2014,” Nickel Asia president and chief executive officer Gerard Brimo said.

However, he said Nickel Asia’s position as a low-cost producer in mining operations will help the company ride out the challenges in the current down cycle.

Nickel Asia is a global supplier of lateritic nickel ore and exports both saprolite and limonite ore to customers in Japan and China. Its operating mines are Rio Tuba, Taganito, Cagdianao and Taganaan sites, all located in the southern part of the Philippines.