Two bids made for Glencore stake in New Caledonia’s Koniambo Nickel
KNS halted its operations in March after Glencore decided to sell its 49% interest.
Nickel Asia Corp. is in talks to unload its minority stake in a key processing plant to Japan’s Sumitomo Metal Mining Co. as the Philippines’ top producer of the metal focuses on upstream mining and renewable energy businesses.
The Philippine miner, partly owned by Sumitomo, aims to sell its entire 15.625% stake in Coral Bay Nickel Corp. and will engage a third party to conduct a valuation of the Coral Bay shares, it said in a stock exchange filing on Tuesday.
Coral Bay is one of Nickel Asia’s two high-pressure acid leaching plants – the Philippines’ only processing facilities for the metal used to make stainless steel and batteries for electric vehicles. The miner will keep its 10% stake in the Taganito HPAL plant, Andre Dy, vice president for treasury and investor relations at Nickel Asia, said in response to a Bloomberg News query.
The Philippines is the world’s second-largest nickel ore supplier to top market China. Nickel Asia’s move comes as the Southeast Asian nation pushes miners to invest in processing facilities instead of just shipping out raw ore to become a major player in the electric-vehicle supply chain.
Over the last three years, Coral Bay’s financial performance was negatively affected by higher operating costs and lower nickel prices on the London Metal Exchange, Dy said. The divestment should “positively impact” Nickel Asia’s growth and diversification goals, he added.
Nickel Asia incurred 503 million pesos ($8.7 million) in equity losses in Coral Bay in January to September 2024, after reporting a 442-million peso loss in the same period in 2023, company data show. With the planned sale of its Coral Bay shares, the miner said Tuesday that it will no longer recognize equity gains or losses from its investment there.
The continuing nickel glut globally will continue to pressure prices “which could impact Nickel Asia’s primary revenue driver alongside equity income its HPAL plants,” said Neil Maderaje, research associate at China Bank Securities Corp.
“By selling its stake, Nickel Asia could generate additional cash, which could be reinvested into other value-accretive developments,” Maderaje said.
(By Manolo Serapio Jr. and Neil Jerome Morales)
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