Stock trading of 6 firms halted due to DENR move

Trading on six listed mining firms was halted by the Philippine Stock Exchange (PSE) Friday for their exposure to mining projects that the Department of Environment and Natural Resources (DENR) will either shut down or suspend for alleged environmental violations.

The PSE identified the six listed firms with “substantial” interest in the mining companies named by the DENR as follows: Benguet Corp. (BC), Global Ferronickel Holdings Inc. (FNI), Lepanto Consolidated Mining Co. (LC), Marcventures Holdings Inc. (MARC), Nickel Asia Corp. (NIKL) and Oriental Peninsula Resources Group Inc. (ORE).

A seventh listed firm, DMCI Holdings, has interest in two of the mines affected by the DENR order but these mines account for only a small portion of the Consunji-led conglomerate’s group-wide earnings. Its shares were down by 0.31 percent yesterday.

DMCI’s Zambales Diversified Metals Corp. was among those set to be padlocked by the DENR while Berong Nickel was set to remain under suspension. The operation of Zambales Diversified had long been suspended by the DENR. In the first nine months of 2016, these two mining firms accounted for only 0.6 percent of group-wide profit. Their combined contribution accounted for 4 percent of DMCI’s net income in 2015.

Trading on ORE, NIKL, LC and BC were halted until 10 a.m. yesterday to allow investors to digest the impact of the DENR’s order. When trading resumed, shares of LC rose by 1.08 percent while NIKL’s shares also firmed up by 0.88 percent. ORE was flat while BC’s shares fell 5.26 percent.

On the other hand, the PSE allowed the trading halt on MARC and FNI to be extended until 9 am on Monday (Feb. 6).

FNI’s Platinum Group Metals Corp. in Claver, Surigao del Norte, was identified by the DENR in a press briefing on Thursday as among those to be closed due to environmental violations, particularly “siltation of coastal waters” and “mining in a watershed.” However, the DENR erred in identifying the mining firm as Platinum Development Corp. in a list released to the media, leading to some confusion on whether it was the same company as the key subsidiary of FNI.

MARC’s operation in Surigao del Norte was also listed as among those lined up for closure along with NIKL’s Hinatuan Mining Corp. in Surigao del Norte.

Lepanto’s mine in Benguet and ORE’s Citinickel project were among those recommended by the DENR for suspension.

With most institutional investors having dumped most mining investments as soon as environmental advocate Gina Lopez was appointed DENR secretary last year, the market now has a more muted reaction to the mining shakeout.

The mining/oil index fell by 0.31 percent Friday following the 1.65 percent drop on Thursday when DENR announced the list of 21 mining firms to be closed and suspended.