MANILA, July 4 (Reuters) - The Philippines has a strong potential to increase its nickel exports to China as an initial study showed high-iron, low-nickel laterite ores produced locally can be converted into marketable iron products, the Mines and Geosciences Bureau (MGB) said on Monday.
The Southeast Asian country, which exports most of its nickel output to China, was the world's third-biggest producer of nickel ore last year, behind Russia and Indonesia.
"We can convert even lower than low grade ores into marketable grade concentrate that is acceptable in China," Leo Jasareno, acting director at the state-run MGB, told Reuters.
"With what we call sintering process, it can be done," he added.
The findings were based on a joint project by the agency with a private local firm using laterite samples from a mine operated by Berong Nickel Corp, a unit of Atlas Consolidated Mining and Toledo Mining Corp , in southwestern Palawan province.
Samples were also taken from a mine in southern Agusan del Norte province operated by MRL Gold Philippines Inc, a unit of Canadian miner Mindoro Resources Ltd .
The tests showed most of the low-grade laterite ores in the country could be "potential feed material" for iron and steel making, MGB chief metallurgist Juancho Pablo Calvez said in a statement.
The MGB has forecast the country's nickel concentrate production this year to rise 19 percent from a year earlier to 23,000 tonnes worth 15.3 billion pesos ($354 million).
Nickel direct shipping ore is projected to increase 55 percent to 20.45 million dry metric tonnes valued at 23.3 billion pesos this year, according to the agency.
In the first quarter, nickel concentrate output fell 1 percent from a year earlier to 9,606 dry metric tonnes, but its value was 34 percent higher at 2.86 billion pesos.
The Philippines expects the value of its metals output this year to rise 24 percent to a record 137.6 billion pesos as higher world prices drive miners to produce more.
Nickel Asia Corp , the country's largest nickel miner partly owned by Japan's Sumitomo Metal Mining Co Ltd , said last month the region was running low on high grade lateritic nickel ore, fuelling higher demand for medium to low grade ores that are available in the Philippines.
The Southeast Asian country has explored only a miniscule amount of its estimated $1 trillion mineral resources, but the one-year-old administration of President Benigno Aquino hopes to capitalise on higher metal prices to boost the domestic economy. (Reporting by Erik dela Cruz; Editing by Rosemarie Francisco)