Listed Global Ferronickel Holdings Inc. (FNI) is eyeing the construction of a $700-million stainless steel plant in the country after it inked a strategic cooperation deal with a Chinese firm.

FNI and Baiyin Nonferrous Group Co. Ltd. have signed a memorandum of cooperation during President Duterte’s state visit to China in an effort to boost trade and economic relations.

Baiyin is a major state-owned enterprise in Gansu province and is one of the largest producers of non-ferrous metals in China.

The deal includes the evaluation of a feasibility study for the construction of an integrated 200-series stainless steel plant in the Philippines. The feasibility study can take up to one year.

FNI said the plant, with estimated total investment of $500 million to $700 million, is expected to have an annual capacity of one million tons using lower grade nickel ore sourced locally.

“We recognize the importance of promoting close cooperation with China to spur economic growth in the country. We see Baiyin as a strong partner who will play a vital role with us in creating greater value added in the nickel value chain in the Philippines,” FNI chairman Joseph Sy said.

The two companies plan to assess investments in value added downstream projects in the country.

Senate Committee on Environment and Natural Resources chair Cynthia Villar earlier said the development of domestic mineral processing plants or downstreaming should be the government’s long-term goal since these would generate more employment and significantly improve the mining industry’s contribution to the economy.

Baiyin and FNI intend to develop a long- term strategic partnership and provide trade financing to the operations of FNI’s Ipilan mine in Palawan.

FNI was allowed to continue the mining activities of Platinum Group Metals Corp., its operating arm in Surigao del Norte, after it passed the audit of the Department of Environment and Natural Resources (DENR).

It also secured ISO 14001 Environment Management Systems Certification for its operations while its Palawan-based affiliate, Ipilan Nickel Corp. is scheduled to be operational by early 2017.

The deal also aims to promote closer industrial and commercial cooperation as both companies recognize the economic benefits of a partnership arising from the availability of low-cost nickel ore in the Philippines.

China is the largest consumer of nickel in the world, accounting for around 50 percent of global consumption.

Nickel ore demand in China continues to grow as production of stainless steel and special alloys also increases.

Baiyin has a total asset value of more than $7 billion and has produced over 5.5 million tons of base metals over the past 60 years.

The Chinese firm is focusing on building a tier 1 international resources company and has developed mining investments in South Africa, Peru and Congo.

Source: https://www.pressreader.com/philippines/the-philippine-star/20161024/282333974444588