DENR told to act as ‘promoter’ of mining industry

Published March 19, 2019, 10:00 PM By Madelaine B. Miraflor

https://business.mb.com.ph/2019/03/19/denr-told-to-act-as-promoter-of-mining-industry/

The Department of Environment and Natural Resources (DENR) was told to promote the highly scrutinize mining industry instead of just regulating it.

At the first Nickel Initiative conference, House Speaker Gloria Macapagal-Arroyo urged the DENR to streamline its administrative processes to fast-track the issuance of permits and settle disputes in the mining sector.

“The DENR should not just act as a regulator. It must also act as a promoter,” Arroyo said.

“Speaking for congress, we should not have adversarial stance. We should help the sector grow,” she added, noting that the sector will help the economy grow as well as create jobs.

Held for the first time and is considered as the flagship project of Philippine Nickel Industry Association (PNIA), the organization of some of the country’s largest nickel mining companies, the Nickel Initiative conference seeks to explore global trends and opportunities in the nickel consuming sectors and looks for possible collaborative areas for development in the future.

Right now, the local nickel industry is anticipating the growing nickel demand from the development of more electronic vehicles, stainless steel, transportation, infrastructure and other energy sectors.

Fitch Solutions, part of international credit rating agency Fitch Ratings, earlier said Indonesia has already surpassed the Philippines as the largest global producer for nickel in 2018 and “will remain so in the years to come” as stringent environmental regulations and policy uncertainty continues to limit the output here.

The latest Fitch Solutions outlook also showed that despite subdued performance in major markets including Canada, Australia and Russia, global nickel production will continue to hold strong this year driven by the ongoing supply recovery in Indonesia and a return to positive production growth in the Philippines.

In the Philippines alone, it expects nickel to pull off an average 1.7 percent year-on-year growth over 2019 to 2028.

“We believe Philippine nickel mining production to begin rising in 2019 following years of decline, as we expect currently suspended mining operations in the country to obtain a license to resume operations over the coming months,” Fitch Solutions said.

From 2016 to 2018, production in the Philippines declined by an average of 22.7 percent as a result of the suspension of open pit mining on environmental grounds.

The production disruptions began in June 2016 when former Environmental Secretary Regina Lopez carried out a series of environmental audits that led to the closure of many of the country’s 41 nickel mines.

The outlook of Fitch Solutions contradicts the forecast earlier made by Philippine Nickel Industry Association (PNIA) President Dante Bravo, who said the country’s nickel ore shipment may go down by 10 to 20 percent this year from the 30 million wet metric tons (WMT) projected nickel output for 2018.

According to him, production will be dragged by the new policy restricting miners to conduct massive digging and mining within their mine sites, among others.

It was in August when Environment Secretary Roy Cimatu signed the 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.

Under the DAO, if a miner is producing 1 million MT or less, they can only extract within 50 hectares of their mine sites, while those producing around 1 million to 3 million MT are only allowed to operate within 60 hectares of their tenements.

Those producing 3 million to 5 million MT, on the other hand, can only excavate within 70 hectares of their contract areas, while those with annual production of 7 million MT but less than 9 Million can only extract within 90 hectares of their mine sites.

There isn’t any part in the Fitch Solutions report that mentioned the DAO and its possible impact in nickel production.

Meanwhile, Fitch Solutions said domestic miners, including SR Metals, Global Ferronickel, Nickel Asia Corporation and CTP Corp, will account for the vast majority of nickel production in the country.

Nickel Asia, in particular, will still be the driver of nickel production in the Philippines, especially as its Taganito and Cagdianoa mines, the first and second largest in the country respectively, have not been hit by the recent closures and suspensions.