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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)

Page 310

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
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
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
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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