The Philippine Nickel Industry Association (PNIA) has warned that mining operations across the country could shut down this year due to a shrinking fuel supply unless the government intervenes to protect the sector.

PNIA board director Martin Antonio Zamora said on Thursday, March 26, that the majority of mining companies in the country have no contingency plans for a scenario in which they can no longer meet their fuel needs.

Zamora, who serves as president and chief executive officer (CEO) of Nickel Asia Corp. (NAC), said his company’s current fuel supply will last only for 30 days.

PNIA board director Tulsi Das Reyes said most companies are in the same boat, while others have a shorter supply, enough to last only 15 days.

“This 15- or 30-day buffer creates a lot of anxiety. We don’t know where the next 60 to 90 days of operations may come from,” said Reyes, president of DMCI Mining Corp.

In the worst-case scenario in which these companies run out of the fuel necessary to operate, he said, “naturally, a shutdown would have to occur.”

“That’s what we’re doing if there’s no supply,” he said in a press briefing.

As a net oil importer, the Philippines is bracing for a tighter fuel supply in the coming weeks as it faces disruptions in shipments due to the conflict in the Middle East, which accounts for 98 percent of its oil imports.

The country is currently under a state of national energy emergency, with its fuel supply expected to last only until the end of next month, according to the Department of Energy (DOE).

To ensure there is enough supply, the government has committed to purchasing oil to boost the local stockpile, having recently allotted ₱20 billion for up to two million barrels.

While the entry of additional supply would be for buffering purposes and for oil companies, Zamora said the mining industry should be considered a “priority industry” that would be allocated such fuel.

“We are an export business. We are going to play an important role there, in stabilizing foreign currencies, our exchange rate, generating jobs in areas where you don’t need subsidies because we employ. So by staying in those areas, we can help a lot in this crisis,” he explained.

If mining companies secure enough supply, Zamora said they are also bracing for higher prices that would increase operating costs.

At prevailing prices of around ₱115 per liter for diesel, the additional cost for mining firms is estimated at around $3 per wet metric ton (WMT).

For now, Zamora said nickel miners are able to absorb such costs, but there is uncertainty as to whether these will continue to rise as fuel prices increase.

“If it doubles, then that’s already $6 or more. I’m not sure that some of the mines will be profitable at that point,” he stressed.

As industry concerns pile up, PNIA president Dante Bravo noted that the country would still retain its spot as the world’s top nickel exporter, mainly driven by production quota cuts in Indonesia.

Indonesia, the world’s largest nickel producer, is limiting the maximum operating capacity of its mine sites, providing opportunities for local firms to plug the demand gap.

This policy change is driving a surge in global nickel prices.

“We are in a position right now to take advantage of Indonesia slowing down,” said Zamora.

PNIA is asking the government to establish special economic zones for mining companies and processors to encourage investment in exchange for incentives.

The group said these industrial hubs would offer expedited processing of permits that otherwise take several years, addressing a major hurdle in attracting investments.

Based on PNIA data, the Philippines accounted for 95 percent of nickel ore exports last year, with shipments reaching 55 million WMT.