Speaker calls for more domestic ore processing

Font Size

Clearing mining misconceptions

SPEAKER Gloria Macapagal-Arroyo said the mining industry needs to set up its own processing facilities to allow value-addition to take place domestically, though some miners expressed skepticism due to the current freeze on granting new mining permits.

In her speech during the Nickel Initiative 2019 held at the Shangri-la Hotel in Taguig City on Tuesday, Ms. Arroyo said: “In line with the President’s other statements regarding raw materials as opposed to finished products, your projects should ideally include processing facilities, if not today, at least in the realistic near future.”

Nickel from the Philippines is shipped directly to smelting plants in China and Japan for processing. President Rodrigo R. Duterte first called for more domestic processing in 2016.

Ms. Arroyo added that “in his State of the Nation Address in July, the President said that raw materials from mining operations should be converted to finished products. There are in fact (companies) that even now are seeking to establish processing facilities hand-in-hand with partners from China: a Masbate gold processing plant, a Panay gold processing plant, a Homonhon nickel processing plant and a Palawan concrete plant,” Ms. Arroyo said.


“If in addition, the 13 proposed MPSA (Mineral Production Sharing Agreement) expansions there were held for a while will include the setting up of processing facilities as part of their business plans, then that too would be within the President’s vision for the mining industry,” Ms. Arroyo said.

Philippine Nickel Industry Association (PNIA) President Dante R. Bravo, in a briefing, said establishing processing plants will require much study, particularly with new mine development restricted.

“Hopefully in the future, we will have another opportunity like value-added processing that is viable. If you put up a value-added processing plant, it is capital-intensive, and it is long term,” Mr. Bravo said.

“You have to guarantee that there is sufficient reserve to supply the plant and it requires exploration, not just one year, but for a number of years,” Mr. Bravo added.

Mr. Bravo also called for a review of the MPSA before investments such as those for processing plants are committed.

“Policies that may seem to restrict that will be a concern for those who will be investing,” Mr. Bravo said.

Ms. Arroyo said that the Department of Environment and Natural Resources (DENR) should facilitate more rapid implementation of mining projects to help boost growth.

“The DENR should encourage proponents to implement their approved projects in the quickest possible time in order to generate economic benefits for the country as soon as possible,” Ms. Arroyo said.

Former President Benigno S.C. Aquino III signed Executive Order 79 which imposed a moratorium on new permits until a new law is enacted giving the government a bigger share in miners’ revenues.

Fitch Solutions has said that the nickel industry’s production is expected to rebound in 2019, in anticipation of approvals to resume mining operations for suspended mines.

“According to our estimates, from 2016 to 2018 production in the Philippines declined by an average of 22.7% as a result of the banning/suspension of open pit mining on environmental ground… Open-pit mining under [DENR Secretary Roy A.] Cimatu is no longer banned but suspended indefinitely until the affected miners take measures to redress environmental compliance failures. Indeed, Cimatu announced in November 2018 that suspended mines will be allowed to resume production once they rectify previous violations of environmental regulations, a process which should take up to six months,” Fitch said.

Mr. Bravo, however, said he still expects a decline in nickel output this year of around 10%.

According to the Mines and Geosciences Bureau (MGB), nickel direct shipping ore production in 2018 was 25.91 million dry metric tons (DMT), down 4%.

Nickel sulfides, meanwhile, amounted to 84,514 DMT in 2018, down 4%. — Reicelene Joy N. Ignacio