Endowed with among the biggest nickeliferrous laterite deposits in the country, the island province of Palawan is also the homeland of three (3) large scale operating nickel mines, one (1) Hydrometallurgical Processing Plant (HPP), and one (1) Lime Milk Plant, namely: Rio Tuba Nickel Mining Corporation (RTNMC); Citinickel Mines and Development Corporation (CMDC); Berong Nickel Corporation (BNC); Coral Bay Nickel Corporation (CBNC); and Unichamp Minerals Phils. Inc. (UMPI), respectively.
Nickel ore production (direct shipping grade) in Palawan slightly dropped by 11% or 0.85 million dry metric tons (DMT) in 2015 from 7.860 million (DMT) in 2014 to 7.007 million DMT. The decline was mainly attributed to the shutdown of mine production of CMDC’s Sofronio Espanola mine project for five (5) months from July to December 2015 brought about by the falling nickel price (Refer to Figure 1). Based on submitted supply contracts of the mining companies, the price went down to almost 50% from an average price of $45.00 per WMT in 2014 to an average price of $23.00 per WMT in 2015, or a difference of $22.00 per WMT. Overall, MIMAROPA Region is still the second largest nickel ore producer in the country during the year in review next to CARAGA Region considered as the nickel capital of the country.
Performancewise in 2015, mine production of RTNMC located in Rio Tuba, Bataraza, Palawan and BNC located in Quezon, Palawan, increased by 5.15% and 6.70% or 249,910 DMT and 54,517 DMT, respectively, while CMDC located in Narra and Sofronio Española, Palawan plunged by 52.78% or 1,156,792 DMT, year on year. In terms of percent contribution to the total production during the same year, RTNMC continued to dominate with 73% or 5.10 million DMT, included in the said total is the limonite ore delivered to Coral Bay Nickel Corporation for processing. CMDC took the second spot with 15% or 1.03 million DMT. Finally, BNC contributed 12% or 0.87 million DMT (Refer to Figure 2).
In addition, with the HPP of CBNC, the province likewise produced mixed sulfides (MS) of nickel and cobalt. The company reported a total of 40,947 DMT of MS with an estimated value of PhP10.40 billion during the year in review.
The number of ore export shipments validated in 2015 also slipped by 5% from 133 ore shipments in 2014 to 126 ore shipments. In terms of volume, a total of 6,243,785 WMT was validated in 2015 against 6,736,079 WMT in 2014, a difference of 492,294 WMT.
Initial data of nickel exports for direct shipping ore in 2015 showed that 77% or 3,718,340 WMT of the total exports went to China while the remaining volume equivalent to 20% and 3% or 954,351 WMT and 159,910 WMT went to Japan and Australia, respectively (Refer to Figure 3). The estimated excise tax paid in 2015 amounted to PhP182 million down by PhP63 million from 2014. Said figure includes the local sales of low grade nickel ore feed to CBNC.
Undoubtedly, the unfavorable price of nickel during the year in review had detrimental effect to the cash flows of the three (3) nickel producing mines in the province. Fortunately, the depreciation of peso against the US Dollar coupled with discounted cost of Diesel fuel provided the mining companies some relief to compensate the loss of nickel price. But such factors were not even enough. Nickel producers in the province still have to implement cost-cutting measures in order to operate just above break-even point. Unless the nickel price recovers, the sluggish 2015 nickel mining situation in the province is expected to continue in 2016.