October 22, 2016

Global Ferronickel Holdings, Inc. and China’s Baiyin Nonferrous Group Co. Ltd. sign deal for strategic cooperation (October 21, 2016)

Beijing, China/October 20, 2016. Global Ferronickel Holdings. (“FNI”), the second largest nickel producer in the Philippines and the largest single lateritic mine exporter in the world. announced today that it has signed a Memorandum of Cooperation (the “MoC”) with China State-owned Enterprise, Baiyin Nonferrous Group Co., Ltd. (“Baiyn”), during President Rodrigo Duterte’s state visit to China to boost trade and economic collaboration between the two countries.

The MoC was signed by Mr. Joseph C. Sy, Chairman of FNI, and by Mr. Liao Ming, Chairman of Baiyin.

Baiyin is a major State-Owned Enterprise formed in the Gansu Province and is one of the largest producers of non-ferrous metals in China.

FNI and Baiyin signed the MoC to promote closer industrial and commercial cooperation as both companies recognize the economic benefits of a partnership arising from the availability of low-cost nickel ore in the Philippines, for which FNI is a key supplier to major customers in China, and China’s large and growing demand for nickel ore which is a key ingredient in China’s production of stainless steel, coins, rechargeable batteries and special alloys. China is the largest consumer of nickel in the world, accounting for around 50% of world consumption.

Pursuant to the MoC, FNI and Baiyin intend to develop a long term strategic partnership and work closely together in evaluating the economic feasibility of various natural resources projects in the Philippines, including but not limited to, providing trade financing to the operations of FNI’s Ipilan mine in Palawan. Also, FNI and Baiyin will cooperate and evaluate investments in value-added downstream projects in the Philippines, including evaluating the feasibility of constructing an Integrated 200-series stainless steel plant in the Philippines with an annual capacity of one million tons using lower grade nickel ore sourced in the Philippines (an estimated total investment of around USD500 to USD700 million).

“We recognize the importance of promoting close cooperation with China to spur economic growth in the country. We see Baiyin as a strong partner who will play a vital role with us in creating greater value added in the nickel value chain in the Philippines.” said Joseph C. Sy. Chairman of FNI.

In turn, Liao Ming, Chairman of Baiyin, said Baiyin is looking forward to a long and mutually beneficial partnership with FNI.

Baiyin has a total asset value of over RMB45 billion (USD7 billion), and has produced over 5.5 million tonnes of base metals over the past 6 decades. The key stakeholders of Baiyin are the State-Owned Assets Supervision and Administration Commision of the Gansu Province and CITIC Guoan Group. Baiyin Group is focusing on building a Tier 1 International resources company and has successfully developed mining investments in South Africa, Peru and the Democratic Republic of the Congo.

FNI is one of the lowest cost producers of nickel ore in the Philippines. Its operations in Cagdianao, Surigao del Norte received ISO 14001:2015 Environment Management Systems Certification and passed the recent audit of the Philippine Department of Environment and Natural Resources. Its Ipilan mine is expected to begin production in 2017.

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