Mining industry seen growing in 2020 on Indonesia export ban
THE Mines and Geosciences Bureau (MGB) said it is projecting the mining industry to grow next year, factoring in the priority mining projects in the pipeline, as well as increased prices for nickel ore due to the export ban in place in Indonesia, the top producer.
“Personally, positive ang outlook ko (my outlook is positive). Una (First), we have signs, like yung ating mga (that our) priority projects that are going to proceed to developmental and commercial extraction,” MGB Director Wilfredo G. Moncano said in news conference.
He cited projects like the Silangan Copper-Gold Project of Philex Mining Corp. in Surigao del Norte, and the Balabag Gold-Silver project of TVI Resources Development (Phils.), Inc. (TVIRD) in Zamboanga del Sur.
In a Sept. 26 letter, the Department of Environment and Natural Resources (DENR) through the MGB approved Philex Mining’s underground sub-level cave mining method for the Silangan mine. This project could be the company’s biggest source of revenue once its 61-year-old Padcal Mine in Tuba, Benguet closes in 2022.
Philex is also in the process of looking for possible investors for the Silangan project to raise 40% of the $750-million initial investment. It has also appointed JPMorgan to advise on possible equity investments and Mizuho Financial Group to raise project financing.
TVIRD, the Philippine affiliate of Canadian miner TVI Pacific, Inc., is in the pre-operational phase at Balabag after its permit was cancelled by former Environment Secretary Regina Paz L. Lopez, who found the project to be near a watershed.
The Chamber of Mines of the Philippines has estimated that the project could attract $20 billion to $30 billion worth of investment.
The Philippine Mining Law of 1995 prohibits operations in critically protected areas, like proclaimed watersheds and forest reserves, but is silent on functional watersheds.
Mr. Moncano said that TVIRD has proceeded to development and commercial extraction since its operation is not covered by the ban on open-pit mining and Executive Order 79, which prohibits granting permits to new mining projects.
Indonesia has also imposed a nickel-ore export ban starting next year, which the Philippines could take advantage of the second-largest producer.
“Ayaw na nilang mag-export ng kanilang nickel (They do not want export their nickel) to China and Japan, so that would be a good reason para mag-increase yung production ng ating (to increase production of our) nickel,” he said.
Indonesia is hoping to develop a smelting industry as an alternative to exporting its ore, hereby capturing more value-added activity. It was the top nickel-producer in 2018 with 560,000 tons, followed by the Philippines with 340,000 tons. Their top export market is China.
He said that the ban may also result in higher prices of nickel, which could make more mines in the Philippines viable.
Philippine Nickel Industry Association (PNIA) President Dante R. Bravo said, “It’s going to boost the local production of nickel and it’s going to improve the prices even for lower grades.”
“Marginal producers… will have more market for lower grades. We might be able to sell that next year and will be able to optimize the ore utilization,” he said, adding that with more stable prices next year, the Philippines could also attract more investors for value-added processing of nickel.