DMCI Mining Corporation expects to surpass its 2022 nickel ore production and shipments after recording notable improvements in the first semester, even as it expects two new mines in Zambales with combined investments of over P500 million to start operations within a year.
In an interview, DMCI Mining President Tulsi Das C. Reyes said, “we attribute our strong performance to improved operational efficiency and permit timing.”
From January to June, production nearly doubled or up by 98 percent from 567,000 wet metric tons (WMT) to 1.12 million WMT, which is even better than its 2022 full-year output of 1.03 million WMT.
Meanwhile, shipments in the first-half of this year reached 1.06 million WMT, equivalent to 73 percent of the total sales volume of 1.45 million WMT in 2022.
“That’s where I’m most proud about. Because Zambales, ZDMC, normally average one million tons a year but we hit 1 million tons in the first six months so we're very pleased that we will have a historical year in terms of shipments this year and that will help offset the lower prices,” Reyes said.
He noted that, “if your volume is high, your cost per ton will go down. But more than that, it's just our people are upgrading themselves, again we've never hit that one million tons this fast.”
For the first half of 2023, DMCI Mining recorded a net income of P708 million, a 35-percent drop from P1.09 billion owing to lower selling prices and increased costs from higher shipments, fuel consumption, depreciation, amortization and labor expenses.
“Shortly after Zambales Diversified Metals Corporation (ZDMC) was granted an ECC amendment, we worked on securing the auxiliary permits, local manpower and heavy equipment needed to boost our production capacity,” Reyes explained.
Last January, ZDMC was granted an amended environmental compliance certificate (ECC) that allowed the company to raise its annual production to a maximum of 2.7 million dry metric tons.
“To sustain our growth momentum and offset the impact of our Berong mine depletion, we are looking to open new mines in Zambales,” said Reyes adding that one mine will be operational by December this year and another is set to open by second quarter of 2024.
ZMDC is operating one mine in Zambales now and it is getting permits for another area inside its property which will most likely operate before year end. It also aims to start operations for another mine next year.
“Now we're talking about a new company and new mine, that is maybe three weeks or one month behind our permit for that asset inside ZDMC,” Reyes noted.
He added that, “I strongly believe that we have a very good chance to get this permit before year-end, but please note we have to get tree cutting permit afterwards, once we get the tree cutting permit, then we can start mining. We also have to do orders for our heavy equipment, sometimes it may have a long lead time so some delays are possible.”
Reyes said the two new mines may require investments of over P250 million each or a total of more than P500 million for the acquisition of trucks and backhoes to cut trees and dig up the ground.
He said both mines have medium to high grade nickel ore deposits although the mine that will open next year has a bigger and higher grade deposit.