RISE IN NICKEL PRICE MAY BRING BACK PHILIPPINE MINE

RISE IN NICKEL PRICE MAY BRING BACK PHILIPPINE MINE

A sharp jump in the world price of nickel is spurring interest in the

purchase of a major Philippines' metal producer nearly two years after it was shut down.

Nonoc Mining & Industrial Corp. was taken over by the Manila government in 1984 after years of being battered by everything from typhoons to labor strife. It was closed in 1986.At least three Australian-based companies are now talking with the government about buying Nonoc, industry sources said.

Heading the pack is Bond Corp., whose Hong Kong unit, Bond Corp. International Ltd., is said to be actively negotiating terms for a purchase. Company officials here declined to comment.

Also said to be in the running, though at a less advanced stage, are City Resources Ltd. and Harrington Metallurgists, part of Rover Holdings of Australia.

City Resources has extensive gold interests in Canada, the Philippines and the South Pacific, but a spokesman in Hong Kong denies any knowledge of the Nonoc talks.

Bond Corp. is close to agreeing a package to buy and revive the mine and its refinery, said Johnny Araneta, chairman of Nonoc.

Nickel prices are now around $7.30 a pound, against $1.60 a year ago. Some mining experts believe Nonoc could be profitable even at $4.

So strong is that feeling of recovery that the Manila government itself might invest up to $100 million in rehabilitating it, Mr. Araneta said, though this is the last resort.

Nonoc has capacity of 31,000 metric tons of pure nickel a year, but would probably operate at 70 percent of that if taken out of mothballs. Even that smaller quantity would account for about 4 percent of world production of around 550,000 tons.

The company was earmarked for privatization last year, in line with government policy of disposing of loss-making assets acquired during the 20- year administration of President Ferdinand Marcos.

The Hong Kong unit of Bond Corp. previously had confirmed it is considering acquiring a substantial stake in ailing Atlas Consolidated Mining & Development Corp., one of the Philippines' biggest gold and copper producers but also struggling.

That mining company has recorded a string of losses since 1984, aggregating $160 million through the end of 1986. It is thought to be looking for $250 million from Bond Corp., which has been talking with several large banks about restructuring the outstanding loans to Atlas.

Among Atlas' principal lenders are Chase Manhattan, Citibank and Chemical Bank.

Nonoc, which has cobalt and iron interests as well as nickel deposits, also has several large U.S. creditors.

It sought court protection in Manila just over a year ago, applying for a status similar to that under Chapter 11 of the U.S. Bankruptcy Code, in hopes of staving off any asset grabs.

Sources said then that nearly a dozen claims had been lodged seeking some 16 billion pesos ($800 million). The company's book value was then estimated at 12 billion pesos.

One of its biggest creditors is Marc Rich Inc., the worldwide commodity dealer, which advanced Nonoc $24 million against future production shortly before the company shut down in 1986.