Philippine metals industry fights Duterte over shutdown order
Companies urge president to stop mine closures in world’s largest nickel ore exporter
by: Michael Peel in Bangkok and Neil Hume in London | February 5, 2017
Philippines accounts for about a quarter of global mined supplies of the metal used in stainless steel © Bloomberg
The Philippines metals industry has vowed to fight a clampdown by President Rodrigo Duterte’s government that would shut more than half the country’s mines and slash nickel ore shipments from the world’s largest exporter.
The crackdown over alleged breaches of environmental and welfare rules branded mining companies “villains” and risked breaching contracts the administration had previously agreed with them, the main mining industry body warned.
The squeeze on the companies is supported by
Mr Duterte and has pushed world nickel prices higher, because the
Philippines accounts for about a quarter of global mined supplies of the metal used in stainless steel. The crackdown is also notable as the first serious dispute between the
outspoken president and domestic industry, in an economy that has been posting some of the highest
growth rates in Asia.
Artemio Disini, chairman of the Chamber of Mines of the Philippines, told reporters on Friday that the sector would first appeal to Mr Duterte to overturn the ban and then move “to the courts” if necessary. The chamber has questioned the fairness of the process, given what it claims is the anti-mining stance of Gina Lopez, environment secretary and former environmental campaigner. “Lopez doesn’t see the mining industry as a government partner — she sees miners as villains,” Mr Disini said.
The Department of Environment and Natural Resources declined to comment on the chamber’s remarks. Ms Lopez on Thursday ordered the closure of 23 of the country’s 41 metals mines, plus the suspension of five others, after an official standards audit. “My issue here is not about mining, my issue here is social justice,” she told reporters. She asked: “Why is mining more important than people’s lives?”
The Philippine nickel wrangle is another twist in a world market already roiled by a ban on exports of the metal’s raw ore imposed in 2014 by Indonesia — but then eased last month. Traders already had warning of the Philippines move when the government in September suspended operations at many of the mines now ordered to close.
The price of nickel traded on the London Metal Exchange rose 5.3 per cent last week to $10,250 a tonne as the metals industry responded to the crackdown in the Philippines. Glencore, the Swiss-based miner and commodity trader, Russia’s Nornickel and Vale of Brazil are among the world’s biggest nickel producers.
“The political uncertainty that has rattled global markets in recent weeks has spread to the base metals sector,” said Daniel Hynes, strategist at ANZ. “Policy announcements in Indonesia and the Philippines have the potential to significantly impact supply.”
The Philippines is the world’s largest nickel producer. If all the recommended suspensions are enforced it will reduce global supplies by about 8 per cent.
Nickel is used to make stainless steel. The ore produced in the Philippines from large open cast mines is prized in China where it is used to make a nickel pig iron, a cheaper alternative to refined nickel.
