Berong Nickel Corp said Friday it was in talks with Australian mining giant BHP Billiton on plans to double its nickel ore shipments to one million metric tonnes under an existing supply agreement.
Berong, a subsidiary of Atlas Consolidated Mining Corp., signed last year a five-year laterite ore supply contract with BHP’s Queensland Nickel Pty. Ltd under which its laterite ore would be shipped to the Yabulu Refinery in North Queensland, Australia. The contract is for supply of up to 500,000 wet metric tonnes a year.
Considered the fourth-biggest source of nickel ore deposit in the world, the mining site in Berong in the southwestern island of Palawan is under a joint venture among Atlas, its unit Toledo Mining Corp and Australian mining firm Investika.
At the sidelines of Atlas’ annual meeting of stockholders Friday, Berong chief executive officer George J. Bujtor said Berong hoped to sign an agreement with BHP Billiton next month so it could start shipping of one million tonnes of nickel ore next year.
Berong is also considering putting up heap leaching facilities over the next three-years, as value-added processing has become more critical in its operations, he said.
Bujtor said the nickel market had weakened because of an oversupply of low-grade laterite ore at Chinese ports.
The price of nickel has gone down to US$21,000 a tonne and is expected to stay at this level in the next 27 months, he said.
For 2008, the company expects nickel ore shipments from its Berong mine to exceed 600,000 tonnes, compared with from last year’s 530,000 tonnes.