September 11, 2015

NIKL’s unit to scale down mining operations in Samar

BusinessWorld today reported that Hinatuan Mining Corp (HMC), a subsidiary of Nickel Asia Corp (NIKL), will be scaling down its operations in Manicani Island in Eastern Samar starting 15 September 2015. As such, it will lay off at least 200 workers.

The company will not be hauling ore from the area and will just continue with the maintenance of the mining site. This comes after the company failed to secure a Mineral Ore Transport permit from the regional office of the Mines and Geosciences Bureau (MGB) despite the approval of the permit by the MGB head office.

Mining operations in the area has been suspended since the early 2000s but ore stockpile from previous operations remain piled on the island. The MGB head office last year issued HMC a permit to dispose of the ore stockpile and this prompted the company to hire staff for the hauling activities.

Our take: While this may further add to the negative market sentiment weighing on the share prices of mining stocks, we note that our forecasts for NIKL does not include any sales from the Manicani Island operations. – WealthSec