Mining audit carries ‘full force of the law,’ Lopez warns violators

by Bloomberg September 23, 2016

http://www.mb.com.ph/mining-audit-carries-full-force-of-the-law-lopez-warns-violators/

The Philippine government said the audit of the nation’s mining industry will carry the full force of law and producers that don’t follow findings and recommendations face closure, reinforcing the government’s tough message in a showdown in the top nickel producer that may see mass suspensions.

“They have to follow, because if they don’t they face closure,” Environment and Natural Resources Secretary Gina Lopez said in a text message from New York, commenting a day after local suppliers challenged the integrity of the probe ordered by President Rodrigo Duterte. “I am not suggesting things, I am mandating the law.”

Nickel is the best-performing commodity so far this quarter as concern that the Philippine audit will disrupt shipments boosted prices that have already been supported by projections for a global deficit. The nation accounts for about 20 percent of global mined nickel supply, with most cargoes feeding China’s stainless steel industry. After several delays, the full results of the audit are due for release on Monday.

“We are an island ecosystem that is densely populated, so we cannot afford mistakes,” Lopez said in the text message. The secretary, who’s said the environment agency would recommend further actions on specific mines to ensure they operate at the highest standards, wants an industry that’s better than Canada or Australia’s, she said.

Nickel surged to $11,030 a metric ton on the London Metal Exchange last month as the audit got under way, the highest level in a year, and the metal leads all members of the Bloomberg Commodity Index so far this quarter. Prices jumped 3 percent to $10,660 on Thursday and traded at $10,540 at 1:48 p.m. in Manila.

The Philippines’ principal mining group has challenged the legitimacy of the audit, saying it’s concerned about how the checks were carried out. The probe was ordered by Duterte and Lopez to ensure suppliers met environmental and welfare standards. Ten mines have been suspended so far, and Lopez said this week more than 10 additional suppliers face closure.