“Anti-mining advocates in Congress are taking advantage of the [Rodrigo] Duterte administration’s harsh stance against the mining industry, and reviving calls for a ban on nickel ore exports,” says Verisk Maplecroft’s Philippines Analyst Eufracia Taylor.
In a short editorial mailed this week, Taylor states that proponents of the measure took inspiration from Indonesia’s ore ban and are convinced that a similar decision would prompt investment in domestic processing and develop a more value-added mining industry.
But the analyst says that the Philippines’ case is not comparable to that of Indonesia. In her view, Manila “would struggle to secure investment in processing plants due to the lower quality of the nickel ore, while poor infrastructure and high electricity costs make domestic processing commercially challenging.”
Taylor believes, however, that China may put pressure on Duterte’s government to at least delay the ban, given its reliance on Philippine nickel ore for its stainless steel supply chain. “The tension between Duterte’s priorities of refining the mining industry and improving relations with China could therefore give mining companies some room to breathe,” she writes.
Nevertheless, miners in the Southeast Asian country remain agitated. On September 21st, results of an industry-wide audit that started in July revealed that more than half of the operating mines in the country could be suspended. According to The Manila Times, most of them are nickel operations in Mindanao.
Specifically, the Department of Environment and Natural Resources recommended 12 mines for licence suspension after it found they had inadequate mining practices and a lack of proper siltation prevention facilities, were carrying out technical violations, and were not complying with planned social development efforts.
Previous to this recent development, 10 mines had been already penalized for environmental violations. Eight of those mines are nickel producers. Many of them, however, should get their licences back once requirements are met, Verisk Maplecroft’s analyst says.
Duterte, who was sworn in as the Philippines president at the end of June, has tightened social and environmental standards for mining companies operating in the country. He calls for “responsible mining,” while his detractors see his stances as populist rhetoric.
This situation combined with Indonesia’s ban has seen a decline on global stockpiles, which resulted in nickel prices rising by 17% this year on the London Metal Exchange. And they could continue to climb in 2018, commodities trader and miner Glencore Plc. told Bloomberg, without giving any specific forecast.
2 Comments
Tom
Good for Canada – Ontario.
Anopheles
It’s good for Ontario, until the governments decide to eliminate that advantage through high carbon taxes and higher energy and environmental costs