Sumitomo helps put up $1.3B Surigao plant

SUMITOMO METAL MINING OF Japan and Nickel Asia Corp., the country’s biggest nickel mining group, yesterday signed a memorandum of understanding in Japan to proceed with a $1.3-billion nickel-processing plant in the municipality of Claver, Surigao del Norte.

Nickel Asia said the project would take three years to complete and construction is expected to start early next year. The project will represent the biggest foreign investment in the Philippine minerals sector to date.

The plant will be constructed adjacent to Taganito Mining Corp.’s nickel mine. Taganito, a subsidiary of Nickel Asia, will supply all of the required nickel ore to the plant over an estimated 30-year project life, while Nickel Asia will take a 20- to 25-percent equity interest in the project under a joint venture company called THPAL Corp. The output of the plant, a mixed nickel-cobalt sulfide, will be purchased by Sumitomo for final processing at its refinery in Japan.

This will be the country’s second downstream nickel processing plant by the Sumitomo-Nickel Asia tandem. The first plant is under Coral Bay Nickel Corp., a joint venture between a Japanese consortium led by Sumitomo and Rio Tuba Nickel Mining Corp., another Nickel Asia subsidiary.

Constructed adjacent to the operations of Rio Tuba in southern Palawan, the plant became operational in 2005 and has been a technical and commercial success. Its initial capacity of 10,000 tons a year of nickel metal equivalent has since been doubled.

Nickel Asia said the new project, triple the size of the initial Coral Bay plant, was considered to be particularly beneficial to the country due to the value-added created by the downstream mineral processing plant.

The project is expected to employ about 4,000 personnel during the construction stage and 1,000 full-time employees when operational, adding that substantial benefits would accrue to the adjoining communities from its social development management projects, while yearly exports of its product would bolster the country’s foreign exchange reserves.

The memorandum was signed by Manuel B. Zamora Jr., chair and founder of the Nickel Asia group, and Gerard H. Brimo, president and CEO. (


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