Canada’s Chemical Vapour Metal Refining Inc. (CVMR) said on Friday it was close to finalising a deal with Philnico Industrial Corp. to reopen the Nonoc nickel mine in the south of the Philippines.

Nonoc has the capacity to produce 41,000 tonnes of nickel a year or 3 percent of world demand and its possible revival would be a major boost to Manila’s goal of revving up its once lucrative minerals sector.

“I am hoping it will be a matter of weeks,” Camran Khozan, president and chief executive officer of CVMR, told reporters.

Khozan also said CVMR would open a nickel refinery in the Philippines within five years.

The privately run group has said before it wants to develop a 60,000-tonne-per-year integrated nickel mine smelter and refinery in the Southeast Asian country.

The group had put an initial price tag of $3 billion on the capital cost of developing a refinery but cautioned that it was only from a pre-feasability study.

The Philippine government gave CVMR a two-year permit on Thursday to explore a 3,757 hectare site on Eastern Samar, in the centre of the archipelago.

Manila wants to attract $6.5 billion in foreign funding to revive its once-mighting mining sector, which fell into decline during the 1980s due to environmental mishaps, land disputes and lack of investment.

NICKEL

CVMR said on Thursday it had signed deals to buy nickel ore from three local firms and an agreement to buy a mining property from a fourth company.

Khozan declined to name the groups or give any details of the costs but said the four agreements would produce 60,000-100,000 tonnes of purified nickel per year.

Geograce Resources Philippines Inc. said in Feb. that it had agreed to sell an unspecified amount of nickel ore to CVMR.

Nickel is used to make stainless steel, coins and magnets and its price has soared in recent years as China seeks metals to fuel its rapid industrialisation.

Philnico, Nonoc’s owner, has been courted by several groups interested in re-opening the mine, which closed in 1982 due to high energy costs and low metal prices.

China’s Jinchuan Group and the Baosteel Group were originally meant to start a joint venture with Philnico and invest $1 billion to reopen Nonoc, which had annual production of 9,600-25,000 tonnes when it operated from 1975 to 1982.

Nonoc island has more than than 144 million tonnes of nickel ore reserves, according to the government, part of the estimated $1 trillion of untapped mineral resources in the country.

Philnico is 55 percent owned by Hong-Kong based Compline Resources Co., about 30 percent by Australia’s Pacific Energy Ltd. , and the rest by local investors.