Reuters reported that China's Jinchuan Group Limited is to invest in two laterite mines in the Philippines after signing agreements with two companies last week.

As per report, Jinchuan, China's top nickel producer and third biggest copper producer, will join Zamora Group and Macroasia Group to develop two laterite mines in Palawan Island in the Philippines.

Laterite is the ore for the production of nickel pig iron and ferronickel in China. Both NPI and ferronickel are used for the production of stainless steel. China is the world's top producer of NPI, a low grade ferronickel with high iron content, and relies on imported laterite ores for NPI production.

Official data showed that China's nickel ore and concentrate imports surged 72% on the year to 21.21 million tonnes in the first seven months of 2011. The Philippines was China's second largest supplier of the materials after Indonesia during the period. The bulk of the imports are typically laterite ores used to make NPI.

Jinchuan may also invest in the Nonoc nickel mine in the southern Philippines. An investment by Jinchuan would revive the production of Nonoc, which was closed in 1982 due to high energy costs and has capacity to produce 40,000 tonnes of nickel a year.

A Jinchuan official said the firm was still working on the Nonoc investment plan and another company official who is in charge of the Nonoc project was not immediate available to provide the progress.

In China, Jinchuan operates the country's biggest nickel mine in the northwestern province of Gansu. But it needs more nickel ores as it expands metal production. Jinchuan is building annual capacity of 600,000 tonnes of copper, 100,000 tonnes of ferronickel and 20,000 to 30,000 tonnes of nickel in the southeast Chinese region of Guangxi.

In 2011, Jinchuan plans to increase production to 130,000 to 140,000 tonnes of nickel and 500,000 tonnes of copper, compared to about 130,000 tonnes of nickel and less than 400,000 tonnes of copper in 2010.

(Sourced from www.reuters.com)