Japan’s Sumitomo Metal Mining Co., which has nickel development projects in the Philippines, plans to spend about 200 billion yen (US$1.9 billion) to develop a nickel mine in the Solomon Islands in the South Pacific, the Nikkei business daily reported Wednesday.
A company excecutive said the report was based on speculation.
“We have been doing research in that the area, but we still haven’t started a feasibility study,” he said.
The Nikkei said that the firm plans to build a refinery in the island nation and start processing nickel ore into nickel metal with 55% purity around 2013, to be shipped to its plant in Japan for further processing.
The planned annual output of around 30,000 tonnes is expected to be sold mostly to Japanese customers as bullion, the paper said.
Sumitomo Metal, which aims to be among the world’s top five nickel producers in the next decade, has several overseas nickel development projects.
Its 10,000-tonne a year Coral Bay nickel plant in the Philippines is scheduled to come fully on line in September 2009. The Coral Bay plant is Sumitomo’s second plant on Palawan Island.
Coral Bay, 54% owned by Sumitomo Metal, aims to double nickel capacity to 20,000 tonnes a year using the Japanese company’s technology to recover nickel from low-grade nickel oxide ore.
The expansion at Coral Bay is scheduled to be completed in 2010.
In addition, Sumitomo Metal’s 30,000-tonne a year Taganito project in the Philippines is slated to be launched in 2012.
As of 0043 GMT, shares in Sumitomo Metal were up 2.1% at 1,999 yen from Tuesday’s close.