Mining sector at risk of more losses, suffers 8% shrinkage in 2016

Published February 2, 2017, 10:01 PM By Madelaine B. Miraflor

http://business.mb.com.ph/2017/02/02/mining-sector-at-risk-of-more-losses-suffers-8-shrinkage-in-2016/

 The worst is yet to come for the mining sector because even if it is yet to feel the real impact of the nationwide audit the government has launched against it, the overall output for minerals in 2016 still suffered a shortfall.

Yesterday, the Department of Environment and Natural Resources (DENR) went on a closure and suspension spree on mining companies as the result of the nationwide audit it did on the sector.

Asked what could be the impact of DENR’s closure and suspension orders to the country’s metallic production this year, DENR Undersecretary and Mines and Geosciences Bureau (MGB) said yesterday that “it should go down more.”

This, after a document provided by MGB showed that the country’s metallic mineral production value incurred an 8 percent shortfall in 2016 from P109.84 billion in 2015 to P100.56 billion, lower by P9.28 billion.

“Poor base metal price, string of mine suspension and mine imposed non-operations due to unfavorable weather conditions, low metal price and/or maintenance status catapulted the metallic sector to its lackluster performance,” MGB said on Wednesday.

In terms of percentage contribution to the total production-value, gold continued to dominate the production scene in 2016 accounting for 44 percent or P44.85 billion of the total metallic minerals production value.

While nickel direct shipping ore together with mixed nickel-cobalt sulfide took the second spot with 37 percent or P36.84 billion followed by copper with 18 percent or P17.76 billion. The remaining 1 percent or P1.11 billion came from the consolidated output of silver, chromite and iron ore.

Nickel direct shipping ore production volume and value alone went down by 23 percent and 41 percent, respectively, from 32.1 million dry metric tons valued at P36.60 billion in 2015 to 24.7 million MT dry metric tons valued at P21.77 billion in 2016.

“It is important to note that of the 28 nickel mines, seven are currently in suspended status and four temporarily stopped their respective mine operations.  The total production of nickel direct shipping ore of this group in 2014 was about 5.2 million dry MT with an estimated value of about R8 billion,” MGB said.

On metal prices, copper and nickel both recorded declines of 3 percent and 11 percent, respectively.