Economy


Mine closures worry nickel buyers




Posted on February 08, 2017


THE Environment department’s decision to shutter and suspend more than three-fifths of the country’s 41 metal mines, which account for half of the country’s nickel supply, is rattling nickel buyers, especially in China and Japan, an industry official said.

A lighted conveyor in Nickel Asia’s processing plant -- BW FILE PHOTO
“It worries trade partners... It’s very difficult to see what will happen based on our relationships because I know the government is trying to push building a relationship with China and Japan,” Philippine Nickel Industry Association President Clarence J. Pimentel, Jr. told BusinessWorld in a Tuesday interview in Pasig City.

“Something like this will be detrimental to our growth,” he added.

Mr. Pimentel also noted that stakeholders of the country’s top nickel supplier Nickel Asia Corp. have expressed concern over the matter at a recent meeting.

However, Nickel Asi Vice-President for Corporate Communications Jose Bayani D. Baylon said that the Hinatuan Mining Corp., one of those flagged for closure, only accounts for ground 15% of the company’s nickel production.

Asked if the firm expects to make gains with competition eliminated, Mr. Baylon said: “The only benefit to us is if the world prices go up. But do we get new markets? No. Our supply [remains committed to existing] customers.”

He noted that he is set to visit Hinatuan on Friday to get updates on its operations and consult with residents of the host community, especially the scholars funded by the mine.

Meanwhile, Global Ferronickel Holdings, Inc. (GFNi) told the stock exchange on Tuesday that its subsidiary Platinum Group Metals Corp., also up for closure, has secured a contract to ship 1 million wet metric tons (WMT) to Golden Harbour International Pte Ltd., a subsidiary of Chinese steel company Tsingshan Group at a spot price for the 2017 mining season.

The country’s second largest nickel firm by output, GFNi said that the recent agreement puts the company’s take-up to 3 million WMT, half of its target of 6 million WMT for this year.

GFNi said it still expects to sign “more supply contracts with its long-standing customers” in time for the mining season

GFNi President Dante R. Bravo said that amid concerns stemming from the DENR pronouncement which are “natural” for investors, “we remain confident in [signing more orders].”

Mr. Bravo added that the company has not received any closure orders from the DENR, a delay which he said is “unusual” considering that Ms. Lopez’s announcement that the notices have been sent to all concerned miners two days before the decision was made public on Feb. 2.

“[E]ven if they issue that order we believe its illegal so we can get relief. We are confident with our legal position,” Mr. Bravo said in a phone interview on Tuesday

PGMC, the firm’s lone operating mine at present, accounts for 12% of the country’s total nickel production.

On prospects at its Cagdianao mine, PGMC has an overall mineral resource estimate of 50.3 million dry metric tons (DMT) as of end-June.

This estimate covers 24% of the area currently being explored.

GFNi added that it subsequently completed a feasibility study that determined total reserves to be at 35.4 million WMT or 23.07 DMT “taking into account the economic, legal and technical factors.”

GFNi shares dropped 3.10% to close at P2.50 apiece on Tuesday.

Meanwhile, the Chamber of Mines of the Philippines (CoMP) said it will invoke the Freedom of Information provision to compel the Environment department to provide full copies of the audit reports.

“We will file this week. It is being finalized and will be submitted to the DENR (Department of Environment and Natural Resources),” said CoMP Chairman Artemio R. Disini in a press conference on Tuesday in Pasig City.

The chamber’s request will be followed by requests for temporary restraining orders with regional trial courts pending a review of the DENR’s findings.

“We’d like to see that actual report generated. Also we’d like to see the specific findings for each and every one of the 28 companies that were either suspend or closed by the secretary,” lawyer Ronald S. Recidoro, vice-president for CoMP’s Legal and Policy division, said yesterday.

“That is the basis for penalties... That’s all we ask so that we can respond properly,” Mr. Recidoro added.

“If she fails to [release the reports], the usual legal remedies will be mandamus. We go to court and compel her to produce these reports,” Mr. Recidoro added.

In an interview with ANC’s Headstart yesterday, Ms. Lopez said documents from the audit were “available” to the public. -- Janina C. Lim