MANILA: Nickel Asia Corp, the Philippines' top nickel ore producer and exporter, said on Friday it will acquire stakes in two smaller miners to expand its resource base by 24 percent, keeping an upbeat view on global demand despite falling prices.
Nickel Asia, partly owned by Japan's Sumitomo Metal Mining Co Ltd, will buy a tenth of NiHAO Mineral Resources International Inc and up to 100 percent of unlisted Geogen Corp. The latter has mining rights over a 2,392 hectare site in the northern Philippine province of Isabela.
The deal with NiHAO, with a market value of $82 million, also grants Nickel Asia the right to explore, operate and develop the firm's mining claims in three other provinces -- Zambales, Misamis Oriental and Masbate.
Nickel Asia, which currently operates four nickel mines in the Philippines and partly owns the country's only two nickel processing plants, said the deal was an important milestone in growing its business.
"While the nickel market is presently at a crossroads, there is no question that future prospects are bright given that global demand for nickel and other minerals will continue to grow," Martin Antonio Zamora, Nickel Asia senior vice president for marketing and strategic planning, said in a statement.
Nickel Asia shipped a record 17.8 million wet metric tonnes (WMT) of ores in 2014 to its Japanese and Chinese customers, up 28 percent from the year before and exceeding its target of 17 million WMT.
The Philippines in 2014 became the biggest ore supplier to China's producers of nickel pig iron (NPI) after Indonesia banned exports of unprocessed metallic minerals.
NPI is used in the production of stainless steel and as a cheaper alternative to refined nickel and ferronickel in China.
Acquiring Geogen would result in a 24 percent increase in Nickel Asia's resource base in dry metric tonne (DMT) terms, which stood at 287 million DMT at 1.27 percent nickel at the end of 2013.
Nickel prices hit six-year lows in recent weeks on worries over weak demand for stainless steel in China. That, and after domestic NPI plants shut due to a crackdown on pollution, prompted traders to step up imports of nickel and related products into China.
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