Bureau of Mines / Minerals yearbook: Metals and minerals 1977
Year 1977, Volume 1 (1977)
Sibley, Scott F.
Cobalt, pp. 303-315 ff. PDF (1.6 MB)
310 MINERALS YEARBOOK, 1977 material purchased for the plant during the first quarter allowed it to operate at increased capacity for the balance of the year. More than 1 million pounds of cobalt was also expected to be produced in 1978. Falconbridge Nickel Mines Ltd. and INCO, Ltd. of Canada cut back nickel production during the year because of a relatively low demand for nickel. This was expected to reduce production of byproduct cobalt. Indonesia.—According to reports at yearend, plans were still being made to go ahead with construction of the $900 million nickelcobalt smelting project of P.T. Pacific Nikkel Indonesia, Ltd., (PNI). PNI is owned by United States Steel Corp. and Hoogovens Ijmuiden BV of the Netherlands. In early 1977, these were the only companies that remained of the original six American and European partners, including Sherritt Gordon Mines, Ltd., and Newrnont Mining Corp. However, at midyear, Amoco Minerals Co., a subsidiary of Standard Oil Co. of Indiana, tentatively agreed to equity participation in the project. In 1969, the Indonesian Government reportedly granted the original consortium the right to evaluate the Gag Island deposit, located near Irian Java. After extensive drilling, Pacific Nikkel outlined minable deposits in excess of 90 million tons of laterite ore. There was a possibility that the Indonesian Government would purchase 20% equity in the project. The company planned to produce about 55,000 short tons of nickel per year using Sherritt Gordon Mines, Ltd.'s, hydrometallurgical process. Japan.—The Japanese Ministry of International Trade and Industry estimated that because of price increases in 1976, demand in 1977 would decline by 5% to 6 million pounds, a decrease from the 6.3 million pounds consumed in 1976. Magnetic materials were expected to account for about 47% of demand, and superalloys, about 12%. No further breakdown was available. Production of refined metal was expected to reach 3.3 million pounds, or about one-half of capacity. Because of reduced demand, imports were also expected to decline to about one-half that of 1976, or about 4.2 million pounds. A manganese nodule processing plant was planned by Sumitomo Metal Mining Co. at its Niihama smelter, with construction to begin late in 1977. Sumitomo is a partner in the Deep Ocean Mining Co., which includes 23 Japanese companies that joined together in 1975. Deep Ocean Mining Co. in turn became a partner with other foreign interests in the OMI consortium. Sumitomo Metal Mining Co. produced cobalt at the rate of about 80 short tons per month by midyear, while Nippon Mining Co. produced at only about 50 short tons per month. The latter rate was about 50% of capacity. Demand for cobalt in Japan reportedly was 200 to 250 short tons per month. Philippines.—Mechanical problems at the Nonoc Island refinery of Marinduque Mining & Industrial Corp. in Surigao Province, reportedly continued to hold down production, but the situation improved in late 1977. The refinery was shut down for annual maintenance and installation of a new boiler late in 1976. Operation at about 55% of design capacity of 3.3 milliQn pounds per year of cobalt was reached~ during January and February 1977. According to company officials, the mechanical difficulties were being resolved but were taldng longer than anticipated to overcome. The operation experienced considerable finan~ cial difficulty during the year, partly -because of strong downward pressure on world nickel prices. As a result, the firm fell into technical noncompliance with terms of a 1975 loan agreement that refinanced the project. This meant that under certain circumstances creditors could begin to insist on accelerated payment of debt. The underlying financial problem was the maintenance of certain working capital and stockholders' equity levels. At midyear, it was announced that the Development Bank of the Philippines had agreed to provide assistance in meeting debt service and working capital requirements. By yearend, the project was expected to reach at least 60% of capacity. Operations were begun at the Surigao facility in October of 1974. Marinduque reportedly planned to construct a cobalt refinery in the Philippines to refine 7 million pounds per year of cobalt contained in mixed sulfide concentrates. The $16 million project was expected to be financed by the Asian Development Bank. Concentrates currently produced are sent to Japan for refining. If a capacity production of 7 million pounds per year of cobalt metal were reached, the Philippines would be among the top five producers of refined cobalt in the world. Company officials planned to increase capacity to improve the profitability of existing operations at the Nonoc Island nickel-cobalt processing facility. Marinduque expected to maintain
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