Jinchuan Nickels Philippine mine negotiations deadlock
Jinchuan Nickel Group’s proposed nickel mining project on Nonoc Island in the Philippines is on hold because its partner kept raising its terms on the back of a buoyant nickel market, a company official said today.
The negotiations have been difficult in many aspects and progress depends on further communication between the two parties, the senior official with Jinchuan Nickel, who asked to remain anonymous, told Interfax.
He said the two companies have decided to delay singing any deal. Jinchuan Nickel will carry out field research at the Nonoc mine again with a report due in May 2007. Its partner, Philnico, will consider other partners, the source said.
Jinchuan Group, China’s largest nickel producer located in Gansu Province, signed a memorandum of understanding with the Philippine government and Philnico on Monday to resolve the Nonoc nickel project’s existing debt and mining right problems by July.
However, despite Jinchuan Nickel’s commitment to take over a $300 million debt in order to win mining rights, Philnico is still pursuing a higher profit from the deal because of the increasing price of nickel since the beginning of the year, the official said.
The project would involve a capital injection of $950 million by Jinchuan Nickel.
The Nonoc mine is located near Surigao City and has a deposit of 144 million tons of nickel ore. Philnico closed it in 1986 due to financial problems.
The Philippine government plans to resume mining by 2010. The LME nickel three-month delivery price closed at $33,400 per ton Monday, rising 136 percent from the beginning of the year.
