MANILA, Philippines — The Philippines is expected to see improvements in the outbound shipment of nickel ore next year as the country benefits from the Indonesian ban on the export of the mineral.
The Philippine Nickel Industry Association (PNIA) said nickel direct shipping ore for 2020 will likely exceed the 39 wet metric tons (WMT) expected production for the year.
“It will be more than 40 million WMT, but whether it will exceed 50 million WMT, I doubt,” PNIA president Dante Bravo said.
“Indonesian export ban is the major factor. It would also depend on prices particularly for the lower grade ores because that’s where the added volume will be coming from,” he added.
Indonesia’s nickel ore export ban has created an opportunity for Philippine nickel miners to alleviate the impending supply shortfall in the Asean neighbor, the largest nickel producer globally.
Bravo said the industry is expecting more mines to resume operations next year to add to the increased inventory.
“In Zambales, some of the mines will resume operations by next year so we have four mines there and that would add up,” Bravo said.
“Some of the mines in Dinagat Islands will also be able to operate,” he said.
Approximately 90 percent of nickel export goes to China, while the remaining 10 percent goes to Japan.
Fitch Solutions Macro Research, a unit of Fitch Group, earlier said the Philippine nickel mining sector sees improved growth this year on the back of restarting nickel operations.
Fitch estimated that from 2016 to 2019, local production declined by an average of 22.7 percent as a result of former environment secretary Gina Lopez’s closure and suspension orders on mines.
Fitch also banked on the Indonesian ban to pull up Philippine nickel production.
“We believe nickel smelters in China, which currently import the majority of their ore from Indonesia, will likely look to the Philippines as an alternative source of supply, due to its proximity and substantial nickel mining capacity,” Fitch said.
The sudden increase in demand could lead to an acceleration of nickel mine development and increased investment into current operational projects, aimed at increasing production in 2020.