PHILIPPINE nickel ore shipments in 2019 may fall by a fifth to a nine-year low of 24 million wet metric tons (WMT) following the decision of the government to minimize the disturbed area of mining operations.
Philippine Nickel Industry Association (PNIA) President Dante R. Bravo attributed the projected decline in nickel shipments to the policy of the Department of Environment Natural Resources (DENR).
“If you limit the open areas, that means you lose certain flexibilities because the mineralization is different across mining concessions,” Bravo told reporters in a news briefing in Quezon City on Wednesday.
“There are areas that have bigger deposits, while there are areas wherein deposits are less. With that, it is likely that production would be reduced by 10 to 20 percent,” he added.
Based on government data compiled and computed by the BusinessMirror, the projected shipments of 24 million WMT of nickel ore for next year will be the lowest since 2010, when the country exported around 20.264 million WMT.
Under the DENR’s Department Administrative Order (DAO) 2018-19, mining firms’ scale of operations would be limited depending on their annual metal output.
Under the order, a mining firm producing a million WMT or less would be allowed to extract ore in a maximum of 50 hectares, while those producing 9 million WMT and above would have a maximum disturbed area of 100 hectares.
Bravo, who is also the president of the Global Ferronickel Holdings Inc., projected that nickel exports for this year would settle at around 30 million WMT, 20 percent lower than last year’s 40 million WMT.
Philippine nickel shipments have been declining for the past three years. The country ships around 90 percent of nickel ore shipments to China.
Latest data from the Mines and Geosciences Bureau of the DENR showed that the country’s nickel exports from January to September fell slightly to 22.170 million dry MT, or around 34.107 million WMT, from 22.401 million dry MT recorded in the same period last year.
In terms of value, Bravo expressed optimism that revenues from nickel shipments would expand next year due to the projected recovery in international prices. However, he did not provide an estimate as to the rate of increase of receipts from nickel exports.
“Like any other commodities, I’m just saying that [prices] may go up if and when the direction we have is like this. We have the [US-China] trade war, elections, the ‘Build, Build, Build’ program—there’s growing consumption for nickel,” he said.
Nickel firms may still continue to ship medium to higher grade of ores rather than low grades to take advantage of better global prices, according to Bravo.
Bravo said those shipping medium and higher grade of ores are benefiting from the recovery of international nickel prices. The value of the country’s nickel shipments in January to September rose by 25 percent to P24.57 billion, from P19.731 billion recorded a year ago, due to higher global prices.