Philippines' Nickel Asia resumes mine operations

The Philippines' top nickel producer Nickel Asia Corp has resumed operations at its biggest nickel mine, Taganito, after a raid by communist rebels early this week and expects to ship ore in the next three weeks, its chief said on Wednesday.

Nickel Asia, partly owned by Japan's Sumitomo Metal Mining Corp, said it does not expect a big reduction in shipment tonnage this year, adding it has started buying new equipment to replace damaged machinery.

But the company cannot determine yet if there would be delays in the 2013 target to complete a new $1.4 billion nickel processing plant adjacent to the mine, even as it expects minimal damage to the facility currently being built.

"We are pleased to advise that TMC (Taganito Mining Corp) has resumed mining operations and estimate that we can commence loading operations of our nickel ore within the next three weeks," Gerard Brimo, company president, said in a statement.

The company sells its nickel ore to China and Japan.

Sumitomo, majority owner of the processing plant, has yet to make an estimate of the damage in the facility, and has not yet communicated any possible delays in completing the project, Brimo said in a statement to the stock exchange.

Taganito was due to ship about 500,000 tonnes of nickel ore in the fourth quarter, equal to a fourth of the mine's planned total shipments this year.

On Tuesday, Nickel Asia chief financial officer Emmanuel Samson said the company would divert output from two mines to cover ore shipments from its Taganito mine.

About 500 million pesos ($11.3m) worth of equipment and structures were damaged in the attack, and the firm said it has "more than sufficient funds" to cover the replacement cost.

Brimo said the company will not stop its mining operations at Taganito despite security concerns, and said it took comfort in the assurance by the local and national government that there would not be a repeat of the incident.

"It is apparent that the insurgents are not happy with the economic progress in this part of the Surigao province accelerated by the commencement of this project," he said.

"Whatever may have been the political agenda for this unfortunate incident, the company will not be deterred in its mission," he said.

Shares of Nickel Asia closed nearly flat on Wednesday, after falling as much as 13 per cent the previous day following the suspension of nickel mine operations at Taganito.

Nickel prices rebounded 1.1 per cent on Wednesday, after a sharp drop the previous day, riding on the 3.1 per cent jump in copper after the Federal Reserve's pledge of more action to aid a struggling US economy.