The Market Monitor Minding the Nation's Business
The order of the Department of Environment and Natural Resources (DENR) for the closure of 21 mainly nickel-producing mines that account for about half of output in the world’s top nickel ore supplies, has triggered a steep rise in the price of nickel in the world market.
Environment Secretary Regina Lopez said the mines shutdown was part of the government campaign to fight environmental degradation.
The government also suspended operations of six more mines, including the country’s top gold mine operated by Australia’s Oceanagold Corp, as Lopez vowed to put the public’s welfare above mining revenues.
Among the companies DENR ordered closed are BenguetCorp Nickel Mines Inc., Eramen Minerals Inc., Zambales Diversified Metals Corporation and LNL Archipelago Minerals Inc. all in Zambales province; as well as Mt. Sinai Mining Exploration and Development Corp., Emir Minerals Corp. and Techiron Mineral Resources Inc., all in Eastern Samar province’s Homonhon Island;
AAMPHIL Natural Resources Exploration, Kromico Inc., SinoSteel Philippines H.Y. Mining Corporation, Oriental Synergy Mining Corporation, Wellex Mining Corporation, Libjo Mining Corporation and Oriental Vision Mining Philippines Corp in Dinagat islands in Surigao;
ADNAMA Mining Resources Corporation, Claver Mineral Development Corp., Platinum Development Corp., CTP Construction and Mining Corp., Carrascal Nickel Corporation, Marcventures Mining and Development Corporation and Hinatuan Mining Corporation, all operating in Surigao del Norte province.
“My issue here is not about mining, my issue here is social justice,” Lopez, a staunch environmentalist, said while showing footage of damage from mining to an audience that included priests and residents of mining communities “Is mining more important than people’s lives?” said.
The mine closures triggered global nickel prices to further shoot up after rising earlier in the aftermath of the suspension of some operations amid an audit of the country’s 41 mines.
Some affected miners said they have yet to receive a formal order from DENR while an industry group said companies would likely challenge the decision in courts, if necessary.
Lopez said the nickel mines ordered to shut down account for about 50 percent of the country’s annual output, which analysts estimate at about 10 percent of world supply.
The risk of nickel supply disruption from the Philippines should boost global prices of the metal, analysts say, with the initial mine suspensions last year and the threat of more having fueled a rally.
“The Philippine disruption should have a bigger impact on the overall nickel market considering it is the biggest nickel ore producer in the world,” Australian-based ANZ analyst Daniel Hynes said.
Three-month nickel on the London Metal Exchange rose to a 2-1/2-week high of $10,375 per metric ton.
Ronald Recidoro from the Chamber of Mines of the Philippines (CMP) said companies named on the list would “definitely” take legal action, initially filing a motion for reconsideration with Lopez’s agency.
“The audit process was clearly flawed,” Recidoro said noting the CMP had opposed the inclusion of anti-mining groups in the audit teams.
President Duterte has backed Lopez’s mining audit, warning last year that the Philippines could survive without a mining industry. He supported Lopez’s latest action last Thursday.
Mines ordered for closure include those run by Hinatuan Mining Corp, a unit of top Philippine nickel ore producer Nickel Asia Corp, and BenguetCorp Nickel Mines Inc.
Several companies, including Australia’s Oceanagold, said they had not received any official orders.
“There is no legal basis for any proposed suspension,” Oceanagold said in a statement.
“The Dipidio operation is not in violation of any laws, rules or regulations and the operation is not posing any threat to public, security, health, safety or otherwise,” it added.
OceanaGold Chief Executive Mick Wilkes said the company would have strong legal ground to overturn any suspension order it received.
“She’s so passionate about… not about the mining laws…but about the little men on the land tilling. And she’s very adamant that they… insisting on the closure of so many. And I support her,” Duterte told delegates to the 38th Philippine Association of Water Districts National Convention at the SMX Convention Center in Davao City.
The President even described Lopez as pro-people and pro-poor. He said that when he took Lopez in as DENR secretary he advised her to just be fair and make her policies legal.
“That’s about the only standard that you follow, what is legal and what is fair. That is the only thing I want to ask,” he recalled telling Lopez.
Reports said DENR’s nationwide mining audit traced to the companies are siltation, leak of mine tailings into water bodies, and illegal tree-cutting which are adversely affecting lives and livelihood of people in the mining areas.
“I’m not against mining but am opposing suffering — we can’t allow such negative conditions to persist,” she said. LUIS LEONCIO