Nickel Mining in the Philippines

- September 19th, 2017

Nickel mining in the Philippines has changed drastically this year, and the direction it goes moving forward will impact the global market.

Nickel mining in the Philippines has changed drastically over the past few months. 
A shifting political landscape has led to strong anti-mining sentiment, with new government figures taking taken a hard line against resource extraction. Many are now wondering whether the Philippines will be able to retain its status as the world’s top producer of nickel, a position it has held for many years.
Even so, some members of the country’s mining space remain hopeful that the industry will be able to thrive once again. For now, one thing is certain: the direction the Philippines goes with its mining policy moving forward will impact the global nickel market.

Nickel mining in the Philippines: Shifting politics

In June 2016, Philippines President Rodrigo Duterte appointed environmental advocate Regina Lopez as head of the Department of Environmental and Natural Resources (DENR). Lopez immediately audited the country’s mines and ordered 26 to shut down due to environmental concerns. A country-wide ban on all prospective open-pit mining projects was also established.
The aggressive play was met with controversy and backlash from the country’s mining industry and parts of the government — Lopez’s appointment to her position was ultimately rejected by the government’s Commission on Appointments.
In her place, former military general Roy Cimatu has been appointed as the leader of DENR. Cimatu’s outlook on the mining industry is more moderate. Speaking about the negative publicity faced by the mining industry, Cimatu stated, “[i]t is time to reverse this and disabuse the public’s mind about the many misinformation and disinformation they have heard about mining,” according to the Manila Bulletin.
Cimatu’s more balanced approach to the industry has allowed miners to be cautiously optimistic in progressing their developments in the fifth-most-mineralized country on the planet.
Despite that progress, the fate of the Philippines’ mining industry remains uncertain. The Mines and Geosciences Bureau (MGB) recently proposed lifting the country’s ban on open-pit mining, and while Duterte still strongly supports the ban, he would like to give miners the opportunity to change their operations over time.
Even with a tough political situation for miners, the Philippines still produced the most nickel of any country in 2016 at 500,000 tonnes. Its closest competitors were Russia and Canada, which produced 256,000 tonnes and 255,000 tonnes, respectively.

Nickel mining in the Philippines: Global impact

Nickel prices have gone up and down this year, but have performed well overall. In fact, three-month nickel prices on the LME reached their highest level this year over the summer. Prices have been buoyed partially by a supply crunch created by the mining ban — MGB data shows a 24-percent drop in the Philippines’ nickel direct-shipping ore output in the first half of the year.
Indonesia’s restrictions on ore exports have also played a role in pushing prices up, as the country is also a major nickel producer. In fact, together the Philippines and Indonesia are especially important in providing nickel to China’s nickel pig iron sector. Indonesia’s ban on nickel ore exports has led China to depend more on the Philippines for sourcing the metal.
China has imported 6.7 million tonnes of Philippine ore year-to-date, a reduction of 7 percent from last year. Apart from the anti-mining efforts of Regina Lopez, a severe monsoon season and standard mine depletion played a large role in reducing the production and export of nickel ore.
Nickel Asia is the largest nickel producer in the Philippines. Its mines include Rio Tuba, Taganito, Hinatuan and Cagdianao. Other companies in the space include Benguet, Platinum Group Metals, Berong Nickel and Eramen Nickel, which is owned by Eramen Minerals. All of those companies have faced DENR-ordered mine suspensions with the exception of Nickel Asia, whose Hinatuan operation was closed voluntarily.

Nickel mining in the Philippines: Other considerations

Aside from the political considerations mentioned above, those interested in nickel mining in the Philippines should also be aware that many mining tenements in the country are in the ancestral territory of indigenous tribes. Mining companies sometimes face opposition from locals on certain pieces of land for this reason, and the conflicts that ensue can be complex and bloody.
For instance, in 2011, members of a Filipino tribe protested a mining venture on Palawan, an island in the country. The tribe did not want its ancestral land being used for mining and involved NGO Survival International, which campaigns for the rights of indigenous peoples. Other protests on the same grounds have occurred in the past.
The Philippines’ mining policy, which was enacted in 2012, was aimed at combating such issues. The primary objectives of the policy are to ensure that the country’s government gets a share of mining revenue, that the environment is protected and that mineral resources are used responsibly. Other efforts have recently been made to create consistency between local and national laws and policies on mining and help improve the regulation of smaller mining operations.
This is an updated version of an article originally published by the Investing News Network in 2014.
Don’t forget to follow us @INN_Resource for real-time news updates!
Securities Disclosure: I, Sivansh Padhy, hold no direct investment interest in any company mentioned in this article.

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5 responses to “Nickel Mining in the Philippines

  1. Dear Sir,
    We have a location for mining nickel, have you design for making smelter? thank you. Regards Soetyono Iskandar

  2. Dear Sir,
    We have a location for mining nickel, have you design for making smelter? thank you. Regards Soetyono Iskandar

  3. Dear Sir,
    We have a location for mining nickel, have you design for making smelter? thank you. Regards Soetyono Iskandar

  4. Dear Sir,
    We have a location for mining nickel, have you design for making smelter? thank you. Regards Soetyono Iskandar

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