The Iligan plant will be the first ferronickel plant to be put up in the country and will be part of PGMC’s three ferronickel smelting plants, according to a PGMC official. The two other PGMC plants will be located in Danao, Cebu and Manticao, Misamis Oriental.

After having completed its financing from Deutsche Bank, the company is now free to sell the ferronickel to any market. PGMC was earlier considering to commit selling up 80 percent of its ferronickel production from its Iligan plant to BHP Billiton, world’s largest mining firm and third largest nickel producer.

A company official said the plant will give tremendous value-adding opportunities in the local mining industry.

"Nickel ore is sold at only $ 14 per pound, but ferronickel is sold at $ 340. You only have to add a cost of $ 150," the official said.

Located at the Assumption Heights in Buru-un, Iligan City, the ferronickel plant will tap production facilities of MCCI Corp. which has been operating since 1954 until MCCI closed its calcium carbide manufacturing in October 2006.

In a feasibility study, the Iligan plant is projected to post ferronickel production of 18,590 metric tons (MT, with 8.196 million pounds of contained nickel at 20 percent) in 2008; 35,802 MT (8.196 million pounds) in 2009, 49,572 MT (21.857 million pounds) in 2010, and 49,572 MT (21.857 million MT) in 2009.

At an average yearly nickel price of per pound, revenue is seen at .721 million in 2008, .334 milion in 2009, .491 million in 2010, and .442 million in 2011.

It will register an average annual income of 4 million out of which excise tax paid to the government is at P134 million while annual income tax is at P1 billion and annual real property tax, P2.2 million.

"The locality will benefit directly from the one percent of the total production cost as social fund or community development projects amounting to an average of P35 million yearly," said PGMC.

The plant is estimated to generate employment to baranggays Bu-ruun and Maria Cristina for 125 persons initially, reaching to 541 at maximum operational capacity.

The plant has a programmed production cost of P2.27 billion in 2008 of which a large chunk of P989 million is for nickel ore costs, P400 million for smelter material charges, P455 million for power, and P242 million for operating cost contingency. Production cost is seen to increase to P4.04 billion in 2009, P5.57 billion in 2010, and down a little to P5.4 billion in 2011.

Nickel ore that will be fed on the smelter plant will be sourced from PGMC nickel mining operations from Dinapigue in Isabela, Toronto and Pulot properties in Palawan, and Cagdianao in Surigao del Norte, and other sources.