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Global Ferronickel unit inks nickel supply deal with China’s Baosteel

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GLOBAL FERRONICKEL Holdings, Inc. is set to supply more nickel ore next year after it signed a new agreement with Chinese firm Baosteel Resources International Co. Ltd.

The company, through its subsidiary Platinum Group Metals Corp. in Surigao del Norte, has forged an annual agreement with Baosteel for the supply of 1.3 million wet metric tons (WMT) of nickel ore for 2021, it said in a disclosure to the stock exchange on Wednesday.

The new agreement is a 30% jump from the supply contract for 2020, which is at 1 million WMT.

Half of the shipment will consist of low-grade nickel ore with 0.9% nickel content and 49% iron content, while the remaining supply will be medium- to high-grade nickel ore with 1.3% to 1.8% nickel content and 15% to 25% iron content.

“Delivery is expected to commence in April 2021 when the dry season starts and the selling price of each shipment will be set on a monthly basis according to the prevailing market price at the time of price setting,” the disclosure said.

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Global Ferronickel President Dante R. Bravo said the agreement is a result of China’s quick economic recovery, adding that it has properly managed its economy despite the coronavirus disease 2019 (COVID-19) pandemic.

“The economic growth in China will further accelerate in the coming year as there are recent announcements that the vaccine would soon be available. Given those prospects, we are very bullish in the nickel space,” Mr. Bravo was quoted as saying.

Baosteel, which is a subsidiary of steel manufacturing firm China Baowu Steel Group, has business interests in mineral resource investment, trading, and logistics services.

On Wednesday, shares of Global Ferronickel in the stock exchange rose 3.33% or P0.05 to close at P1.55 apiece. — Revin Mikhael D. Ochave

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