Rebel attack closes major Philippine nickel mine

MANILA, Philippines—One of the Philippines’ biggest nickel mines suspended operations after communist guerrillas attacked the facility on Monday, setting equipment on fire, company and military officials said.

The Taganito Mining Corp. site in Claver, Surigao del Norte, on the troubled southern island of Mindanao, was shut down after more than 200 fighters of the New People’s Army raided the area, briefly taking some employees hostage.

They were released afterwards but it was not clear when the mine, owned by Nickel Asia Corp., the Philippines’ largest nickel ore producer, could resume operations, company officials said.

The attack was seen as a big blow to the mining sector, recently the darling of the local stock market given buoyant global commodity prices, as it highlighted security risks that the Aquino administration should address in its bid to attract investors.

The stock market has yet to factor in this news, which came out after the end of trading session. Nevertheless, shares of the Nickel Asia, led by businessman Manuel Zamora Jr., were down by 4.6 percent to P17.26 per share alongside the bleak trading for the day.  It had a market capitalization of P24.25 billion as of Monday’s close.

Joseph Roxas, president of the local stock brokerage Eagle Equities Inc., said on Monday the market was still waiting to hear the official statement from the company on how extensive the damage was.  He added that the market would want to know how long the suspension of operations would be.

“Because of this, all mining firms will beef up security,” Roxas said.

Fund manager Gus Cosio, president of First Metro Asset Management, expressed concern that the attack would become a stumbling block for the growth of mining investments in the country.

“But I’m sure the government will try to protect other mining claims because of their economic significance. I think most mines make provisions for possibilities like this, anticipate that one day such visits would occur and some would try to extract the so-called revolutionary tax. Nickel Asia probably already made provisions for that kind of a scenario,” Cosio said.

Regional police chief Superintendent Reynaldo Rafal said there were no signs of casualties despite the fighting.

“They (the NPA) established ambush positions all over and all our reinforcements were attacked. There was fighting all over the place,” said Rafal.

Military reports said 10 dump trucks, eight excavators, two barges and a building were burned at the Taganito mine while a smaller nearby nickel mine of Platinum Metals Group was also attacked.

Nickel Asia chief finance officer Emmanuel Samson said mining operations and nickel ore loading at Taganito would be temporarily suspended because of the damage.

Samson told AFP he was not aware of any casualties in the attack.

The NPA, which has nearly 5,000 fighters across the archipelago, often resorts to attacking rural businesses such as mining companies if they refuse to pay “revolutionary taxes.”

However, Samson said the communists had not demanded any payments from them.

The Philippine government has opened peace talks to end the rebels’ 42-year-old Maoist campaign but there is no ceasefire in place and the guerrillas continue to attack government and private installations.

Rebel attacks last year killed 187 government forces and dozens of civilians were caught in the crossfire, according to Brussels security think-tank the International Crisis Group.