PHILIPPINE nickel miners are expected to boost ore production next year when Indonesia bans exports of the raw material used in stainless steel and batteries, the head of the local nickel miners’ lobby group told Reuters on Monday.
“This supposed export ban from Indonesia will boost production from the local miners, particularly next year once it takes effect simultaneous with the start of the mining season,” Dante R. Bravo, president of the Philippine Nickel Industry Association, said.
The Philippines, which has 29 nickel mines and two nickel processing plants, usually ends its mining season in October, when heavy rains and strong winds hamper mining and shipping operations. Production resumes in March or April of the following year.
Indonesian ore was generally of a higher grade than ore from the Philippines, he noted.
“However, Chinese smelters have been able to process our lower grade ores, so supply of lower grade ores coming from the Philippines is not an issue,” said Mr. Bravo, who is also president of Global Ferronickel Holdings Inc., the Philippines’ second-biggest nickel ore producer and exporter.
Indonesia’s Energy and Mineral Resources Minister Ignasius Jonan said he has signed a new regulation on banning ore exports, according to a voice recording verified by a ministry spokesman, sending nickel prices soaring on Friday.
Nickel prices in Shanghai hit a record high on Monday, while they jumped to a five-year high in London following Indonesia’s move.
Mr. Jonan, speaking to journalists in Yogyakarta, said nickel ore exports will be allowed until end-December.
Mr. Bravo did not give any estimate on Philippine ore output and shipments next year, but he said Indonesia’s policy move will pave the way for increased sales of lower-grade 1.2%, 1.3% and 1.4% nickel ores.
The Philippines has lost some share of the huge Chinese nickel ore market to Indonesia after the latter lifted its previous ban on mineral exports in 2017, as Chinese buyers preferred higher-grade ores.
Amid increased supply from Indonesia, the local nickel industry had projected a 10-20% drop in ore production this year, from about 30 million wet metric tons in 2018.
They also expected the government’s move to limit mining areas to hurt their operations.
The Philippines’ new mining curbs that took effect from September last year limit the land that miners can develop at any one time, a move aimed at protecting the environment. — Reuters