China's Baiyin Nonferrous Group Co agreed to consider setting up a stainless steel plant in the Philippines that could cost as much as $700 million, as part of a wider push to boost trade and economic ties between the two countries.

The State-owned firm will look at various resources projects in the Southeast Asian nation under a memorandum of understanding signed with Global Ferronickel Holdings Inc, the Philippine producer said in a stock exchange filing on Friday. Under the deal, signed during President Rodrigo Duterte's state visit to China, Baiyin may also provide trade financing to Global Ferronickel's Ipilan mine in Palawan province, it said.

"We recognize the importance of promoting close cooperation with China to spur economic growth in the country," Global Ferronickel Chairman Joseph Sy said in a separate statement. "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."

Global Ferronickel jumped as much as 8.7 percent at the Philippine Stock Exchange after a one-hour trading halt. Other miners including Marcventures Holdings Inc have expressed interest in expanding their operations to nickel processing with Chinese partners, as Duterte looks to forge closer ties and replace the longstanding alliance with the United States.

The stainless steel plant would cost $500 million to $700 million, with an annual capacity of 1 million metric tons using ore from the Philippines, according to Global Ferronickel, the nation's second-biggest producer.

The two companies are seeking to "promote closer industrial and commercial cooperation" given China's large and growing demand for the ore used in stainless steel, coins, rechargeable batteries and special alloys, according to the statement. China is the world's largest nickel user, accounting for about half of total consumption.

Bloomberg