Originally posted on Business Mirror on May 15, 2017 by Jonathan Mayuga.
Miners of nickel, previously the top mineral export of the country with a 60-percent share in total shipment abroad, are looking at a strong rebound for the rest of the year, with newly appointed Environment Secretary Roy A. Cimatu signaling openness to allow shuttered mines to resume operations after a review.
Dante Bravo, president of Global Ferronickel Holdings Inc., the second-largest nickel producer in the country, said nickel production in the country “will be a bit boosted, because of the replacement of the former environment secretary [Regina Paz Lopez].”
Bravo said that, with the pronouncement of Cimatu that he is supportive of responsible mining, “there is less uncertainty at this point”. “We expect that all of those who are supposed to have problems will be able to address whatever issues that they have and be able to produce and continue to operate,” he noted.
Going to the miners’ favor, Bravo added, is the continuing nickel-supply shortage in China.
With this, Bravo said even the partial lifting of Indonesia’s nickel-export ban will not affect nickel-mining companies in the Philippines. “We expect the export in Indonesia to be less than 7 million wet metric tons for 2017,” he added.
Nickel production
Nickel dominated Philippine mineral exports from 2012 to 2015, with the joint production value of nickel direct shipping ore and mixed nickel-cobalt sulfide consistently taking the top spot with a four-year average of about 49 percent of the total metallic production value.
The highest recorded contribution made by nickel was in 2014 at 60 percent of the total, or P85 billion, when Indonesia imposed its ban on export of unprocessed nickel. However, in 2016 and 2017, gold bested nickel due to a sequence of mine operation suspensions in nickel mines in Zambales and Palawan.
According to the Mines and Geosciences Bureau (MGB), of the 28 nickel mines, 21 reported zero production in the first quarter of 2017. Among the reasons for this are the intermittent rains, stoppage of operations for maintenance and suspension of operations due to environmental issues.
“A nickel-mining operation, being surface mining, is always vulnerable to the weather condition. In Surigao and Dinagat Islands rains come in the months of January, February, March, October, November and December, with January being the wettest month. About 19 nickel mines are located in Surigao and Dinagat Islands,” the MGB review said.
Nickel direct shipping ore in the first quarter of the year incurred deficit in both production volume and value, with setbacks of 47 percent and 46 percent, respectively, from 43,612 metric tons (MT) with estimated value of P3.48 billion in January to March 2016, to 23,004 MT with estimated value of P1.88 billion in the same period this year.
The MGB reported that metallic mineral production value grew by 5.1 percent, from P22.79 billion in the first quarter of 2016 to P23.96 billion during the same period this year on account of the robust metal prices.
The good performance of gold and mixed nickel-cobalt sulfide (MNCS) resulted in the positive turnout. Production value of gold and MNCS went up by P1.48 billion and P1.01 billion, respectively, the report said.
Gold continued to dominate metals output, with 51 percent of the total valued at P12.16 billion during the review period. The Didipio Gold Project of OceanaGold Philippines Inc. in Nueva Vizcaya and the Masbate Gold Project of Filminera Mining Corp. and Philippine Gold Processing and Refining Corp. topped the list of gold producers, with 1,951 kilograms and 1,632 kilograms, respectively. The combined gold output of the two projects accounted for more than 58 percent, or P7.07 billion, of the country’s gold-production value.
Review of Lopez orders
Ronald Recidoro, vice president for Legal and Policy of the Chamber of Mines of the Philippines (COMP), said with Lopez out of the picture, “her decisions are all currently under review”. And Cimatu’s statements lately have been encouraging for mining investors.
“The thrust for consistent regulation and to fix the image of the mining industry are two things we have been pushing for since Secretary [Ramon] Paje. We remain cautiously optimistic that Secretary Cimatu will keep a balanced perspective about responsible mining, and in reviewing GL’s [Gina Lopez] decisions in the last 10 months,” he said.
Recidoro said the COMP will push for a review of Lopez’s policy pronouncements and orders and, if they are not supported by law, will push for their reversal.
“We are not asking for a blanket reversal, only for a rational review, and a decision that is impartial and based on scientific, technical evidence that has basis in law,” he said.