PH’s mining sector earns higher at P122-B even with lower output

Published February 27, 2019, 12:00 AM

by manilabulletin_admin

By Madelaine B. Miraflor

The Philippine mining sector is still benefiting from China’s move to raise its stainless steel production that despite a continuous decline in output, the overall value of what it has produced in the entire 2018 managed to rise to P121.94 billion.

Mines and Geosciences Bureau logo (Courtesy of mgb.gov.ph)
Mines and Geosciences Bureau logo (Courtesy of mgb.gov.ph)

A latest data from Mines and Geosciences Bureau (MGB) showed that the Philippines’ metallic mineral production value went up by 10.42 percent from P110.43 billion in 2017 to P121.94 billion in 2018, an P11.51 billion increase.

This was the second year in a row that the metallic minerals industry was saved by the improving global prices. At the local scene, the industry continues to suffer from lower output amid regulatory uncertainties and a threat of higher tax.

Except for copper and chromite, majority of mineral commodities saw a decline in their respective output, with nickel still suffering the most from the audit that former Environment Secretary Regina Paz Lopez conducted two years ago.

Of the 2018 metals output, nickel direct shipping ore and mixed nickel-cobalt sulfide continued to lead the pack in terms of value with 45.25 percent share, or P55.18 billion.

Gold was in second spot with 36.74 percent contribution, or P44.81 billion, followed by copper with 16.96 percent share, or P20.68 billion. The remaining 1.05 percent, or P1.28 billion came from the combined contribution of silver and chromite.

To be specific, nickel direct shipping ore and mixed nickel-cobalt sulfide’s production value rose by 16 percent from P24.65 billion to P28.59 billion, an increase of P3.94 billion.

China continued to be the country’s top export market for nickel, followed by Japan.

“The strong demand from China for its stainless steel production kept metal prices in better levels. China remains the largest market for metals over 50 percent of the global consumption,” MGB said.

Philippines is currently one of the world’s biggest exporters of nickel, the primary material in the production of stainless steel.

But for 2018, the country’s nickel production was also down by 4 percent from 27.09 million dry metric tons (DMT) to 25.91 million DMT year-on-year.

This, as ten or 30 percent of the 30 listed nickel companies reported zero production due to care and maintenance program and suspension by the government.

Philippine Nickel Industry Association (PNIA) President Dante Bravo said in earlier interview that the new policy restricting miners to conduct massive digging within their mine sites, among others, will still make it hard for the country to produce more of the said mineral commodity this year.
He was referring to Department of Environment and Natural Resources’ (DENR) Department Administrative Order (DAO) on progressive rehabilitation, which aims to minimize the disturbed area of a mining project at any given time.

Bravo said the country’s 2019 nickel ore shipment may further go down by 10 to 20 percent from the 30 million wet metric tons (WMT) or the more than 20 million MT of projected nickel output for 2018.

Aside from this, there is also a huge concern among mining companies about the higher tax the government may impose this year as part of the next phase of administration’s Tax Reform for Acceleration and Inclusion (TRAIN).

Right now, a potential new fiscal regime on mining is now being deliberated in Senate, which would pave the way for the lifting of the ban on new mining projects.

Meanwhile, copper production volume and value went up by 1 percent and 7 percent, respectively, from 280,394 DMT and an estimated value of P19.30 billion in 2017 to 282,391 DMT with estimated value of P20.68 billion in 2018.

As of now, there are only four mines in the country that produce copper.

Precious metals gold and silver, on the contrary, exhibited declines in their production records in 2018.
Gold incurred a 9 percent and 2 percent deficit in volume and value, respectively, from 22,749 kilograms (kg) valued at P45.80 billion in 2017 to 20,765 kg valued at P44.81 billion in 2018.

Silver, on the other hand, saw both its output and value shrank at 6 percent and 9 percent, respectively.
In terms of prices, MGB noted that the price of nickel and copper improved by 26.40 percent and 8.54 percent last year.

From an average price of $4.68 per pound in 2017, nickel price went up to US$5.92 per pound in 2018, while copper grew from US$2.72 per pound to US$2.95 per pound year-on-year.

Gold followed suit, with an average price of US$1,265.48 per troy ounce, from US$1,252.43 per troy ounce, year-on-year.

As of now, the country hosts 48 operating metallic mines consisting of 30 nickel mines, eight gold with silver as co-product, three copper with gold and silver as co-products, three chromite, and four iron mines.

There are also two hydrometallurgical nickel processing plants, and two gold processing plants.
Aside from these, there are 15 existing Exploration Permits and 12 declared Minahang Bayan or People’s Small-Scale Mining Area, nine for gold and three for chromite.

 
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