Berong Nickel Stops Production

Berong Nickel Corporation production dipped down to only 16,279 tons of ore for the fourth quarter of 2008.Production was reduced in response to the increasing stock levels, deteriorating markets and onset of the non-shipping window.

In October to February, laterite ore shipments are difficult due to rough sea conditions, making loading unsafe.

In a disclosure to the Philippine Stock Exchange, Atlas Consolidated Mining and Development Corporation reported that a total of 47,995 wet metric tons of nickel laterite ore was shipped to BHP Billiton in Australia last October at an average grade of 1.54% nickel (approximately 492 tons contained nickel on a dry basis) and 34.13% iron. Production and shipping volumes for the full year 2008 was 476,850 tons (53,000 tons lower than 2007).

The Chinese market for laterite ore declined and is expected to remain depressed well into 2009. This is an expected response to the continued depressed LME nickel prices. Anecdotal evidences suggest more than eight million tons of laterite ore currently stockpiled at Chinese ports.

The markets for both the blast furnace process and the electric arc furnace process have been impacted with reports that over 90% of the production capacity have been shut down. Chinese imports for the last quarter are expected to be less than 1.5 million tons, a large portion of which is low grade nickel laterite( <0.9% Nickel) with high iron content which substitutes for higher priced iron ore feed.

Berong is partially insulated from bad Chinese market conditions by BHP Billiton ore supply contract, which provides for supply of up to 500,000 tons per annum of nickel laterite ore until 2013. Negotiations to increase the sales volume to 1MM tons per annum were unsuccessful, with BHP Billiton allocating only 400,000 tons for the entire 2009. Half of this volume can be supplied from presently existing stockpiles, which means full scale mining operations can be deferred until the second half of 2009.

With more than enough stocks to meet the initial shipments to BHP Billiton, all
production activity at Berong has ceased for the time being. Less than 50 people are currently employed at the mine site. The downsizing left more than 600 employees and contractors unemployed in a region with little alternative opportunities.

BNC continues to provide essential services to the community, including operation of the water treatment plant, a medical facility and supply of teachers and educational scholarships.

Zamboanga 2008 Agriculture Production Down. Corn Dropped 17%

The Philippines' National Census and Statistics Board reported lower agricultural production in Zamboanga peninsula for 2008: palay dropped 0.44%, camote by 5%, corn by 17.24%, abaca by 19%. Higher production was reported for calamansi (9.72%) and cassava (5.57%).

Total palay production output during January to December 2008 for Zamboanga Peninsula decreased by about 0.44 percent or 2,449 metric tons(MT) lower compared to the same period last year (CY 2007) due to decrease in available area for harvesting by about 2.0 percent.

This decrease is due to the damage caused by a flash flood during the 4th quarter of 2008 particularly in Salug valley area in Zamboanga del Sur. Zamboanga Sibugay also suffered from a flash flood last March 8, 2008 that affected the areas of about 499 hectares in Imelda, Diplahan, Siay and partly in Payao.

Tropical depressions Buchoy and Frank also damaged 32 hectares in mid-year, affecting palay production in Zamboanga City.

Total corn production output in Zamboanga Peninsula for January-December 2008 dipped 17.24 percent or 37,870MT. lower compared last year (CY 2007) due to continuous rainfall experienced by almost all provinces in the region, particularly in the province of Zamboanga Sibugay in which 186 hectares were flooded during the first quarter of 2008.

Harvest area also decreased by 16.25 percent due to significant number of marginal farmers temporarily stopped planting corn attributed to high cost of fertilizers. Some farmers shifted to cash crops that can be grown without fertilizer application like Cassava, Mongo and Peanuts.


The selected crops production of Zamboanga Peninsula for calendar year 2008 registered a slight decrease of 1.41 percent or 32,612.89MT. lower compared to the preceding year.

Highlights:

• Abaca dropped 19.92 percent due to lack of striping machine for marginal area, particularly in the province of Zamboanga Sibugay.
• Camote dropped 5.30 percent due to excessive rainfall during the 3rd and 4th quarter of 2008 in the province of Zamboanga del Sur.
• Coconut w/ husk (Matured and Young) dropped by 1.69 percent due to lower yield attributed by long dry spell experienced in some parts of the region beginning 2007.
• Mango dropped in production due to excessive rain causing failure of artificial induction to produce fruits.
• Rubber reduces its volume of production due to defoliations, in some parts of Zamboanga del Sur during the 4th quarter of 2008.
• Calamansi posted an increase of 9.72 due to demand of juice making and processing in both Zamboanga Sibugay and Zamboanga City.
• Banana and Cabbage increased 2.55 percent and 0.53 percent, respectively due to demand and good market value.
• Cassava increased 5.57 percent due increase in area planted, plus support of the San Miguel Corporation and Local Government Units (LGU’s).

Source: NCSB Press Release