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2023
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02
New acquisition of mining rights in Davao mining area and feasibility study of HPAL factory by Nickelite
Philippine nickel miner Nickel Asia Corporation has obtained the right to become the exclusive mining service contractor for two mines in East Davao, which have already issued mineral sharing agreements.
In the information disclosed to the Philippine Stock Exchange on February 17th, Nickel Asia stated that Hallmark Mining Corporation and Australian Asia Link Mining Corporation have accepted NAC's Letter of Intent (LOI).
The letter of intent will make NAC or its wholly-owned subsidiary the sole exclusive mining service contractor for Hallmark MPSA, located in Mati and San Isidero in the Davao East region, covering an area of 4999.71 hectares. It will also become the sole contractor for Australia Asia's MPSA, which covers an area of 5000 hectares and is located in Mati and Gov. Geneoso in East Davao.
The commitment of NAC in the letter of intent depends on NAC's due diligence and exploration activities, as well as the execution of the final agreement between the two parties. In addition, the letter of intent also allows for feasibility studies to determine the economic and technical feasibility of NAC establishing high-pressure acid leaching (HPAL) or equivalent mineral processing plants in the MPSA area.
Martin Antonio G. Zamora, President and CEO of Asia Nickel, stated at a media roundtable discussion in January that there are plans to collaborate with Sumitomo Corporation to build a third factory in the Philippines for processing nickel ore.
According to Mysteel, NAC has partnered with Sumitomo Corporation to own two HPAL factories in the Philippines: one located in Rio Tuba, with NAC owning a 10% minority stake, and the other located in Taganito. NAC also owns a 15.6% stake in Coral Bay Nickel Corp. on Palawan Island. At present, two local HPAL factories produce mixed sulfides, with nickel content reaching 55% after processing. They are mainly exported to Japan, where they are further processed into pure nickel for the production of electric vehicle batteries.
To build a third new HPAL factory, a mining site with at least 100 million tons of nickel reserves is needed to provide raw materials for the HPAL processing plant. Since it takes three years to build a factory, investors in nickel processing should start in 2023 or 2024.
To promote the production of electric vehicle batteries in the country, the Philippine government must first encourage the production of mixed sulfides and further nickel refining business to attract electric vehicle battery manufacturers to enter the country. But the limitation is that there are not many mining areas in the country with a scale of 100 million tons of nickel ore reserves. Moreover, compared to other countries such as Indonesia, the cost of investing in the country is also high, including expensive electricity, infrastructure, taxation, and unstable policies.
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