Global Ferronickel Holdings Inc., the country’s second largest nickel ore producer, is acquiring a 20-percent interest in a Chinese smelting firm for $75 million or about P4.4 billion.
FNI said in a disclosure to the stock exchange Monday it signed a definitive agreement to acquire a stake in Guangdong Century Tsingshan Nickel Industry Co. Ltd.
It said the acquisition would be made through the purchase of a 22.22-percent stake in GHGC Holdings Ltd., which in turn owns 90 percent of GCTN stock portfolio.
“The acquisition is expected to create reliable and consistent synergies between FNI as a nickel ore supplier and GCTN as a value-added processor and support our ongoing diversification projects to boost profitability,” said FNI president Dante Bravo.
GCTN is a nickel alloy enterprise in China and operates one of the world’s advanced smelters with RKEF technology in a 33-hectare facility employing over 600 employees. The plant uses a rotary kiln technology that produces about 28,000 tons of pure nickel annually.
GCTN caters to customers in Guangdong’s Economic and Technological Development Zones and abroad.
Bravo said the acquisition would help manage risks, optimize value to stakeholders and develop downstream integration of the value chain.
FNI said it would continue to pursue investments in high-growth firms and industries that could enhance operational and cost efficiencies. Aside from nickel ore mining, FNI also has investments in logistics, cement and steel production and port operations. FNI operates the Ipilan nickel mine in Palawan and a nickel mine in Surigao del Norte under Platinum Group Metals Corp.
The share price of FNI fell 4.2 percent Monday to close at P2.22.