The new policy restricting miners to conduct massive digging and mining within their mine sites, among others, will make it hard for the Philippines, one of the largest nickel producers in the world, to produce more of the said mineral commodity next year.
Philippine Nickel Industry Association (PNIA) President Dante Bravo said the country’s nickel ore shipment may go down by 10 to 20 percent next year from the 30 million wet metric tons (WMT) or 19.5 million MT of projected nickel output for this year.
“My projection is that because of the new regulation on mine rehabilitation program, which requires to limit the area where you can operate, it’s likely that the production will be reduced by 10 to 20 percent,” Bravo said on Wednesday.
It was in August when Environment Secretary Roy Cimatu signed the Department of Environment and Natural Resources’ (DENR) Department Administrative Order (DAO) on progressive rehabilitation, which aims to minimize the disturbed area of a mining project at any given time.
The order covers all Mineral Agreements (MAs), Financial or Technical Assistance Agreements (FTAAs), and other similar mining tenements having surface metallic mines under development, construction or operating stage.
Under the DAO, if a miner is producing 1 million MT or less, they can only extract within 50 hectares of their mine sites, while those producing around 1 million to 3 million MT are only allowed to operate within 60 hectares of their tenements.
Those producing 3 million to 5 million MT, on the other hand, can only excavate within 70 hectares of their contract areas, while those with annual production of 7 million MT but less than 9 Million can only extract within 90 hectares of their mine sites.
Bravo, who also serves as the president of Global Ferronickel Holdings, Inc. (FNI), the largest single lateritic mine exporter in the world, said this policy will largely affect the country’s nickel production in 2019 and the following years.
“If you limit the open areas in mine sites, that means you lose certain flexibility,” he added.
But in terms of the value of nickel, Bravo said there may be an improvement moving forward because of better global prices.
This, as the overall nickel inventory may go down following an increase in global consumption.
Right now, Philippines is still the largest supplier of nickel ore to China, the world’s second largest economy.
For the first nine months of the year, the country’s production of nickel went down from 22.4 million MT to 22.2 million DMT, based on a data from the Mines and Geosciences Bureau (MGB).
According to the agency, the government agency tasked to regulate the mining sector, the zero production of 11 out of the 29 nickel mines in the country, either due to suspended operations or being under care/maintenance status, “continued to weigh heavily on the overall performance of nickel.”