The government of the Philippines plans to decide the fate of nickel mines with suspended operations and revoked contracts in July.
Department of Environment and Natural Resources (DENR) Secretary Roy Cimatu will visit nickel mines in the country next month to see if they are operating responsibly, and told reporters during an industry forum, “hopefully by next month we can come up with the decision on appeals regarding the mining contracts.”
Cimatu took over the position from anti-mining advocate and acting DENR Secretary Regina Lopez on May 8. Earlier in the year, Lopez had ordered the closure of 26 of the country’s 41 operating nickel mines and revoked 75 mineral production sharing agreements.
Cimatu, who is seen as having a more “mining-friendly stance” than Lopez, also said, “I am going slowly about these issues on mining, I will concentrate first on the environment. But that does not mean mining isn’t a priority. That’s why I have plans to visit some mining companies.”
The Philippines is the world’s top nickel producer and produced 500,000 MT in 2016 despite suspending half of its mining operations in September of that year. The suspension in production increased nickel prices by 2 percent on the London Metals Exchange (LME).
As of June 27, nickel was trading at $9,030 per tonne on the LME. BMI Research recently downgraded its forecast for the base metal, commenting that it sees the nickel price averaging $10,250 in 2017. Nickel prices could move lower if operations in the Philippines are allowed to come back online.
Nickel mines and the environment
There is also a storm brewing between the Philippines and the country’s second-largest nickel miner. DENR Undersecretary Demetrio Ignacio said the agency is preparing to file a court case against Global Ferronickel Holdings’ (PSE:FNI.PS) subsidiary, Ipilan Nickel, for cutting down trees in the town of Brooke’s Point in Palawan province.
“We are filing both administrative and criminal charges against them,” said Ignacio. He told reporters that the government is doing an inventory of all the logs the firm removed; they will serve as evidence in the case.
“[The company] did tree cutting activity in two areas. In one area, they secured a permit but they don’t have ECC (environmental compliance certificate). In the other area, they don’t really have any permit,” Ignacio was quoted as saying in the Manila Bulletin.
Clemente Bautista, national coordinator for the Kalikasan-People’s Network for the Environment, said Cimatu should have rescinded the miner’s contract for its “grave violation of environmental laws” instead of just canceling its tree-cutting permit.
In May, the company’s resident manager, Ferdinand Libatiqui, argued that Ipilan’s tree-cutting activities were legal because it was appealing the cancellation of its ECC. The country’s Mines and Geosciences Bureau said Ipilan should have stopped cutting down trees since its ECC was canceled on December 14, 2016. Brooke’s Point Mayor Jean Feliciano said she would press charges against Ipilan for tree cutting without an ECC and without a mayor’s permit from the local government.
According to Business Mirror, the company cut a mix of old-growth and secondary trees. The majority of the 7,000 trees cut down are premium native species.
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Securities Disclosure: I, Melissa Shaw, hold no direct investment interest in any company mentioned in this article.