Chinese black sand miner Nicua Mining Corp. has proposed to put up a $250-million iron-ore processing facility in Leyte to help develop the Philippine steel industry.
The mining firm’s decision came at a time when the Philippines’ and China’s economic ties started warming up with a whole package of investments and financial assistance promised by China to the Philippine government.
Nicua in a recent meeting with the Philippine Economic Zone Authority stressed the benefits of having a strong steel industry, especially in the “depressed region of Eastern Visayas.”
“We will be creating a technical working group that will identify the required assistance this company will need. Once we have developed our steel industry, it will propel our economy towards industrialization,” said Peza director-general Charito Plaza.
A black sand or magnetite sand miner, Nicua proposed to utilize 6.4 million metric tons of its mining output in Cebu to produce 3 million MT of steel and 27,000 MT of vanadium, a chemical element used as base for steel alloy to produce hi-speed tool steel for aircraft and jets.
Using heat from the kilns and electric arc furnace, the company is eyeing to produce as much as 90 megawatts of power to stave off its power requirement of 210 MW that will be sourced from geothermal power plants in Leyte.
“Because of the cheap geothermal power, the steel produced will be in the lowest quartile of the world steel price,” the company said in a presentation.
The Chinese company said the project could inject more than $5 billion annually into the economy and reduce the country’s growing steel importation, now valued at $3 billion yearly.
The company said about $1.5 billion in foreign exchange savings wouls be generated once a national steel industry was established.
Employment is seen to grow from an initial 3,000 to over 4,000 including facility staff and security people.
Nicua said the steel company would be majority Filipino-owned with the minority shares held by the Chinese businessmen.
Nicua mines magnetite sand or magnetite iron ore crystals from the rice lands converted as mining areas in Leyte for export to China.
The Environment Department suspended its mining license in 2012 after two fish kill incidents in nearby Lake Bito were traced from its operations.