Rebel attack, strong peso jack up Taganito project cost to $1.6-B
MANILA, Philippines - The insurgency attack on the Taganito Nickel Processing Plant Project and the volatile foreign exchange rates have pushed up the cost for the project in northern Mindanao to US$1.59 billion from $1.3 billion.
In a disclosure to the local exchange on Tuesday, November 20, listed mining firm Nickel Asia said $150 million-worth of damages was sustained by the plant facility as a result of the October 2011 insurgency attack and other increases in cost.
This alone accounted for more than half of the $290 million increase in project cost.
The remaining $140 million increase was incurred due to the difference in currency rates for construction fees that are non-US dollar denominated.
"While there was a temporary pause in the project due to the October 2011 incident, subsequent work on the plant is progressing smoothly. The project is on schedule to be completed in the fourth quarter of 2013," Nickel Asia Senior Vice-President Emmanuel Samson said in a letter to the Philippine Stock Exchange (PSE).
The project is the country's second hydrometullergical downstream plant. Nickel Asia has a direct 22.5% equity interest in the plant, which is being constructed adjacent to the company's Taganito mine.
Once operational, Nickel Asia said the plant will provide a guaranteed outlet for low-grade nickel ore from the Taganito mine and possibly from other Nickel Asia operations over an estimated 30-year period.
Nickel Asia is a global supplier of lateritic nickel ore, and operates as a nickel mining company in the Philippines. The company owns 4 operating mines, Rio Tuba, Taganito, Cagdianao and Taganaan sites, all of which are located in southern Philippines.
As of December 2011, Nickel Asia's subsidiaries includes Hinatuan Mining Corporation, Taganito Mining Corporation, Cagdianao Mining Corporation, Rio Tuba Nickel Mining Corporation, Falck Exp Inc., La Costa Shipping and Lighterage Corporation, Samar Nickel Mining Resources Corporation, and Cordillera Exploration Co., Inc. - Rappler.com