PH to fall short of nickel supply to China
The Philippines will unlikely meet China’s nickel ore requirements despite the resumption of several mining operations in the country, according to an S&P analysis.
The S&P Global Market Intelligence industry report said Philippine mined nickel output is expected to rise over the next five years as producers try to meet Chinese nickel ore demand.
However, S&P analysts said: “We believe that legislation will remain a major hurdle for restarts and new projects, therefore the Philippines will be unable to meet Chinese nickel ore demand over our forecast period.”
In 2020, three suspended nickel mines in the country resumed operations as the government turned to the mining sector to help mitigate the economic impact of the coronavirus disease 2019 (Covid-19). The international researchers noted that these restarts and production from existing mining operations was meant to increase Philippine mined nickel output from 340,000 tonnes in 2020 to 550,000 tonnes in 2025.
“However, we believe that existing environmental restrictions on Philippine mining will limit the scope for further mine restarts or additional production from new mining projects in the medium term,” S&P analysts said.
“This will prevent the Philippines from meeting China’s nickel ore requirements in Indonesia’s absence, driving Chinese primary output down from an estimated 715,000 tonnes in 2020 to 490,000 tonnes in 2025,” it added.
The Philippine Nickel Industry Association (PNIA) earlier reported that the country’s nickel export value reached about P25 billion between January to September of 2020, a P1-billion increase from the P24 billion posted in the same period in 2019.
Based on a report from the Mines and Geosciences Bureau (MGB), the Philippine nickel sector produced a total of 18.5 million dry metric tons (DMT) in 2020, a 14-percent decline compared to the 21.6 million DMT production in the previous year.
MGB said the lower production was mainly due to the enhanced community quarantine caused by Covid-19 between March to May 2020 where movement of mineral products were limited throughout the country.
PNIA President Dante Bravo said that the increased performance in export value for the nickel industry was mainly driven by the increase in prices of nickel in the market. The improved world price of nickel in 2020 came from China’s steady demand.