The country’s nickel mine production is expected to decrease by up to 20 percent next year due to various regulations set by the Department of Environment and Natural Resources (DENR) as well as the movement of nickel prices in the world market.
“It’s likely that the production would be reduced [by] 10 to 20 percent,” said Dante Bravo, president of the Philippine Nickel Industry Association (PNIA), in a press conference in Quezon City on Wednesday.
Nickel mine output for this year reached about 30 million wet metric tons (WMT) or 19.5 million MT, after separation from the fluid. In 2017, nickel production was 36 million WMT or 23.4 million MT.
The decline on nickel mine production started in 2016 after it posted a 31.4-percent production cut due to unfavorable weather conditions, low prices in the international market, and DENR’s suspension of mining operations, ordered by former Environment Secretary Regina Paz L. Lopez, due to their detrimental effects to the environment, particularly the watersheds.
“If you limit the open areas, that means you lose certain flexibility because the mineralization across mining concessions [differ],” said Bravo, who is also the president of Global Ferronickel Holdings, Inc. (FNI), the country’s second largest nickel ore exporter.
In terms of value, however, he said, “For domestic, we’ll have better prices in 2019.”
China remains the country’s biggest market, Bravo said. The Philippines exports more than 90 percent of its nickel ore to China.
“We’ve been shipping more medium grade ore because of the low prices of low grade ore,” he added, noting that this practice may continue until next year.
Meanwhile, with the government doubling its efforts to achieve downstream operations in the country, Bravo emphasized it is not yet feasible for the Philippines to push for it as there are various factors needed to be considered.
“Do you have sufficient reserves? Because to put up a plant, it requires administrative 50 years of reserve. Even the regulatory environment right now… [orders] limitation on areas where you can operate,” Bravo pointed out.
Nevertheless, Bravo said the country may overall expect “modest growth” in the nickel industry by 2019 despite various challenges facing the billion-dollar sector, which is also looking forward for a more intensified support from the government.
“Eventually, we hope the government will continue to support and promote the mining industry because we believe that [it] is an important treasure of national development. We generate revenues, employment, metal reserves. We are going to be able to [contribute] to our industrialization and we are going to be able to help in the economic growth in this country,” bravo said.
The Philippines has 48 metallic mines, with 30 digging for nickel ore, most of which is shipped to top market China, where it is used to produce stainless steel.