Business Activities News
- Philnico stops nickel talks with Jinchuan
Date: 30-Jan-2007 Sources: (Shenzhen Daily)
THE Philippines' Philnico Industrial Corp. said yesterday talks with China's Jinchuan Group Ltd. on a joint venture to reopen the Nonoc nickel mine had hit a snag and the firm was talking with four other investor groups.
Philnico chairman Evaristo Narvaez said the company has ended talks with Jinchuan after the Chinese group indicated it wanted to do a feasibility study on the project, a move that could further delay the reopening of a mine that has been closed since 1982.
Narvaez said four other groups from China, Russia and Japan have started their due diligence on the Nonoc mine in the southern Philippines, which has the capacity to produce 41,000 tons of nickel a year, equivalent to about 3 percent of world demand.
'We have stopped talking with them,'Narvaez said. 'Let them do their feasibility study if they want to but we will not deal with them exclusively.'
'We cannot afford another delay,'he said.
Failure to get a deal comes despite sky-high nickel prices. The metal hit a record US$38,950 a ton Friday on tight global supply.
'We want them to compete in terms of price, timing, and other commercial terms and conditions,'he said. 'We want to conclude it as fast as possible.'
State-owned Jinchuan and the Baosteel Group, China's biggest steel firm, agreed in April 2005 to invest US$1 billion to revive the Nonoc mine, part of the Philippines' plan to revive its once lucrative minerals sector and boost economic growth.
Since then, the Chinese group had finished due diligence on the project. In July, it signed a debt accord with the Philippine Government and Philnico, which needs to settle some US$300 million in debts stemming from the mid-1990s when it bought the mine from the government.
Last month, Narvaez said the Chinese group offered Philnico a 15-percent stake in the planned joint venture, subject to the conduct of another feasibility study that would be completed in May.
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