Gov’t foresees dimes from mining, but miners espy nickel | Inquirer Business

Gov’t foresees dimes from mining, but miners espy nickel

Gov’t foresees dimes from mining, but miners espy nickel

DIGGING DEEP Nickel Asia’s Hinatuan Nickel Mine in Surigao del Norte exports saprolite and limonite ore. —CONTRIBUTED PHOTO

The government is convinced that the Philippine mining sector will continue to sustain the growth momentum it exhibited in the previous year, yet a group of miners think otherwise because of unpredictability in the industry amid favorable prospects abroad.

The Mines and Geosciences Bureau (MGB) believes the outlook for the mining industry “remains strong” for 2024 due to various factors—the preference for green technologies and Industry 4.0, to name a few.


“On the international front, considering the clear shift towards renewable technologies or so-called green technologies coupled with the emerging industry 4.0 technologies” or the so-called Fourth Industrial Revolution, demand for “essential or critical” metals will go up, the MGB says in a report dated Dec. 11, 2023.


“The essential or critical metals for the advancement of said technologies remain under the spotlight. These include minerals such as gold, nickel, cobalt, copper and iron,” the bureau says.

The inclusion of Indonesia in the Philippines’ export market for nickel ore will give the Philippine mining a lift as experts note the supply of nickel ore in Southeast Asia’s largest economy is a bit tight.

Nickel, a metal that is tough and harder than iron, has many domestic and industrial applications.

For instance, it is used in manufacturing lithium-ion batteries to power an electric vehicle. Nickel is also an input in plumbing fixtures as well as in kitchen implements like pots and pans.

“They [experts] expect China’s demand for this ore from the Philippines to grow as they begin to stock up given Indonesia’s supply situation together with the anticipation of the rainy season which is prevalent towards the end of the year in the Philippines [and hampers output and shipments from] the nickel-rich Caraga region,” the MGB adds.

On the other hand, the Chamber of Mines of the Philippines (COMP)—which comprises the largest mining, quarrying and mineral processing companies in the country—is less confident about the sector making any strides in 2024 amid looming uncertainty, such as a weaker Chinese economy.

Michael Toledo


COMP chair Michael Toledo tells reporters that Indonesia is anticipated to produce nickel pig iron (NPI), considered a cheaper alternative to pure nickel for producing stainless steel.

Toledo says NPI factories are the entry point of Philippine nickel ore into China, but COMP anticipates Indonesia to keep producing cheap NPI.

“Meantime, we don’t know when China’s economy will improve,” the lawyer adds. “Most developed countries are challenged at this time.”

Although the copper sector is expected to keep up with the demand in the next few years, questions still linger as to whether or not the local copper scene can meet the increasing requirement for transitioning into renewable technologies.

“As the global demand for critical minerals for the energy transition intensifies, however, there are concerns on whether copper from Philippine mines could keep up,” Toledo says.

“Since no new copper mines are expected to operate in at least the next five years, there could be a supply deficit that would drive prices upward,” he adds.

Following a snub from the past administration in the last few years, the sector regained its luster in 2023.

Metallic production rose by 7.28 percent to P189.08 billion in the nine months to September last year from P176.24 billion in the same period a year ago, according to the MGB.

Nickel ore and its by-products contributed the most to the overall output value with a share of 47.6 percent in term or P89.99 billion.

Gold came next with 41.07 percent or P77.65 billion, followed by copper with 9.94 percent or P18.79 billion and silver, chromite and iron ore with 1.4 percent or P2.64 billion.

Also, the output volume of nickel directly shipped as ore totaled 28.9 million dry metric tons, an increase of 24.08 percent. It has an estimated value of P53.54 billion.

The average price of nickel slightly dipped to $10.39 per pound but the MGB says it is still above prepandemic levels.

Gold output increased by 6 percent to 22,935 kilograms, valued at P77.65 billion. The yellow metal’s prices averaged $1,932.07 per troy ounce, up by 5.8 percent.

The sector yielded 195,533 dry metric tons of copper, 2 percent higher although its aggregate value reached P18.79 billion as copper prices dropped to $3.90 per pound.

Silver production decreased by 14 percent to 35,784 kilograms, bringing down its overall value by 9 percent to P1.42 billion.

Chromite output settled at 67,877 dry metric tons, valued to P957.65 million.

Toledo says favorable metal prices and weather bode well for the nickel sector.

“The nickel sector’s creditable performance can be attributed to improved nickel ore prices and better loading conditions on account of good weather, particularly in the southern part of the country,” Toledo says.

Toledo also says gold, considered as the world’s safe-haven metal, helping protect investors against economic downturns, performed as well.

“Meanwhile, low copper prices were offset also by good weather, which resulted in less production interruptions, as well as by the strong (US) dollar-to-peso exchange rate,” he says.

Apart from the Department of Environment and Natural Resources’ ongoing review of laws and regulations governing the mining sector, the MGB says a total of 12 projects are seen to start in the next six months.

The MGB says one magnetite sand (iron) site will go on stream in Cagayan Valley as will one nickel laterite site in Central Luzon. Other new mines will include gold in Bicol; four nickel, copper and gold in Davao; and five nickel, copper and gold in Caraga.

Also, the DENR will continue the promotion of Minahang Bayan sites or small-scale mining operations, hoping to boost gold, silver and chromite production.

Environment Undersecretary Carlos Primo David says in a statement the DENR wants to regulate small-scale miners nationwide to formalize their operations and ultimately integrate them into a broader mining sector.

This would help modernize industry standards and guarantee adequate support for them to operate within established standards and safety protocols.

“We’re looking to register small-scale miners, individually, at first, followed by the establishment of a loose organization as the foundation for a more formal association. Sort of like a cooperative toward a Minahang Bayan registration,” David says.

Republic Act No. 7076, or the People’s Small-scale Mining Act of 1991, defines small-scale mining as such activities that rely on manual labor using simple implements and methods instead of explosives or heavy equipment.

Based on MGB data, the country has 57 declared Minahang Bayan sites as well as four other small-scale sites that are slated for declaration.

Wanting to unlock more opportunities, some industry players are batting for additional reforms to attract more quality investments from foreign entities.

The Philippine Nickel Industry Association (PNIA), representing the majority of nickel producers across the country, earlier proposes the creation of a one-stop shop to shorten the approval of mining permits to just six months to a maximum of one year from the current processing period of as long as 10 years.

“The usual process that has been done for decades will have to be thoroughly reviewed, redesigned to become more efficient and really conducive to foreign investments, quality investments,” PNIA president Dante Bravo tells reporters.

To date, the Philippines has 21 mining projects located within mineral reservation areas — 20 that produce nickel and one that produces chromite.

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The government has collected P5.09 billion in excise tax and P1.97 billion in royalties from the development and use of the mineral resources within the mineral reservation areas in the first nine months of 2023.

TAGS: economic outlook, mining

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